(New York) The New York Stock Exchange ended close to equilibrium on Friday, after digesting good employment figures which had initially raised concerns about a tightening of US monetary policy.
The Dow Jones gained 0.10%, while the NASDAQ lost 0.18% and the broader S&P 500 index edged down 0.12%.
Wall Street had opened sharply down on learning that the US economy had created 263,000 net jobs in November, well above the 200,000 expected by economists.
“These figures are a sign that (the US central bank) is not out of business,” commented Charlie Ripley of Allianz Investment Management. “We expect monetary tightening to continue into next year. »
“The point that was particularly annoying for the market, and for the Fed (US central bank), is that the average salary has increased, rather than stabilizing,” said Quincy Krosby of LPL Financial.
The average salary has, in fact, increased by 0.6% over one month, i.e. double what was expected.
A sign of the initial tension in the New York market, bond rates initially soared.
The yield on 10-year US government bonds hit 3.63%, down from 3.50% the day before, before falling just as sharply to 3.46%, its lowest level in almost two month and a half.
As the hours passed, operators revised their judgment and finally welcomed this news of a job market that was still vigorous, despite a series of rate hikes by the Fed and the onset of an economic slowdown.
“This report is a positive development for the economy and lends credence to the hypothesis that the Fed could succeed in bringing the US economy to a soft landing,” said Peter Essele of Commonwealth Financial Network.
“Investors realize that the pace of job creation continues to decelerate”, even if it remains higher than expected, “which gives the Fed the luxury of continuing to raise its rates, at a more moderate pace”, Quincy Krosby said.
“What we are looking for now is continuity in the market,” she continued, “to know if it can hold next week. »
“With the (US) economy continuing to perform well, the year-end rebound that is taking shape could turn into momentum in 2023,” according to Peter Essele.
The initial impression of operators after the publication of the employment report had been very unfavorable to the technology sector, which is very dependent on credit conditions to finance its growth.
But it finally limited the damage, and some big caps like Netflix (+1.09%) or Microsoft (+0.13%) even ended in the green.
In lag, Meta shone (+ 2.53% to 123.49 dollars), while the group on Friday called on politicians, regulators and elected officials to propose a regulatory framework for the metaverse, a priority for its CEO, Mark Zuckerberg.
Tesla also stood out (+0.08% to 194.86 dollars), the day after the fanfare delivery, Thursday, of its first electric truck, on the site of one of the manufacturer’s factories, in Sparks ( Nevada).
Its competitor Nikola, who had been the first, at the end of 2021, to deliver electric trucks, was doing better (+9.62% to 2.85 dollars).
Chinese stocks listed on Wall Street celebrated the further easing of health restrictions in several Chinese cities on Friday.
Among them, the platforms Alibaba (+5.22%) and JD.com (+5.00%), as well as the electric vehicle manufacturer XPeng (+14.84%), were particularly sought after.
Crude down
Oil prices, for their part, concluded in a slight decline, after the cap at 60 dollars of the price of Russian oil by the West and before an OPEC + meeting on Sunday.
A barrel of Brent from the North Sea for delivery in February lost 1.50% to 85.57 dollars.
Its American equivalent, the barrel of American West Texas Intermediate (WTI) for delivery in January, also lost 1.50% to 79.98 dollars.
In the middle of the session, the European agreement was announced which plans to impose a ceiling of 60 dollars per barrel on the price of Russian oil sold to third countries, in addition to the EU embargo which comes into force on Monday .
The device aims to prohibit companies from providing services allowing the maritime transport (freight, insurance, etc.) of Russian oil beyond the ceiling of 60 dollars, in order to limit the income derived by Moscow from its deliveries to countries like China and India.
Some analysts, however, pointed out that Russia was already selling some of its oil below the price of 60 dollars.
“We are trying to understand the impact of this ceiling with the European embargo. Will it work in tandem? wondered John Kilduff of Again Capital.
The instrument must indeed reinforce the effectiveness of the European embargo which intervenes Monday, several months after that already decided by the United States and Canada.
“That’s a lot to take in, that’s why prices fell slightly before we had a better idea of the consequences,” added John Kilduff.
He noted that this “generous” level of cap allowed “Russian oil to flow” in this winter period of peak demand for crude for the West.
The market is also awaiting the meeting of representatives of the members of the Organization of the Petroleum Exporting Countries and their allies (OPEC+) on Sunday in virtual format.
Analysts leaned towards the status quo. “I don’t expect anything new,” said John Kilduff.
“It is unlikely (that OPEC +) will take new measures this Sunday”, also estimated Barbara Lambrecht of Commerzbank.
Saxobank analyst Ole Hansen expects “a meeting strong in words but weak in action, given the unclear impact of an EU embargo on Russian oil from December 5”.
According to him, the group should renew its previous decision, namely the reduction of its total quotas by 2 million barrels per day.
On the Toronto Stock Exchange
The Toronto Stock Exchange closed lower on Friday, while the major US indices ended without a clear direction after a choppy session marked by the release of better than expected data on the North American labor markets.
The jobs numbers pushed markets lower in early trading on fears the data would lead to sharper interest rate hikes from central banks, said Anish Chopra, chief executive of Portfolio Management.
“Job growth, job creation, has been higher than expected,” Chopra said. There were certainly concerns among investors earlier in the morning, with volatility earlier in the session. »
The losses eased, however, once investors digested the news and likely factored in a broader view of the economy, including a slowdown in housing and other areas, he continued.
“The economies in Canada and the United States seem to be slowing down, so we are having the impact central banks want on the slowing economy. There will always be (exceptions), certainly if we look at job creation. »
The Toronto floor’s S&P/TSX Composite Index lost 39.79 points to end the session with 20,485.66 points. He posted a decline of a hundred points in the morning and had managed to climb briefly into positive territory in the afternoon.
The day saw a mix of losses and gains across all sectors of the Toronto Stock Exchange. Telecommunications, utilities, information technology and financials were all down, while energy, industrials, base metals and healthcare, in particular, were up.
Cannabis companies helped buoy Toronto’s healthcare sector, including Canopy Growth, whose stock soared 9.1%, and Tilray Brands, with the stock up 9.6%, after the chairman American Joe Biden has signed a medical cannabis research bill.
Toronto’s energy sector also posted a slight gain, despite the price of crude oil falling US$1.24 to US$79.98 on the New York Commodity Exchange, while gas prices natural fell 46 cents US to US$6.28 per million BTU.
Oil lost some feathers following news of a European Union deal to cap the price of Russian oil, but it hasn’t posted big losses lately, despite the volatility , observed Mr. Chopra.
“The energy is quite volatile, and it has been under some pressure lately over the past month […], but she generally stayed the course in there. »
In the currency market, the Canadian dollar traded at an average price of 74.25 cents US, down from its average price of 74.44 cents US on Thursday.
The Canadian Press