The latest US jobs report is surprisingly robust - not good news for Wall Street traders. They see this as a further indication of significantly rising interest rates and only access a few papers. Weak signals come mainly from the chip sector, in AMD's wake other manufacturers are also going down.
Wall Street ended trading on Friday with significant losses. The Dow Jones index lost 2.1 percent, the S
The focus was on the job market report for September, which surprised with an unexpectedly low unemployment rate. Instead of the forecast 3.7 percent, the rate was only 3.5 percent. The number of newly created jobs was slightly below the forecast. The report was primarily followed with a view to the monetary policy of the US Federal Reserve. In this respect, strong data weighed on the stock market. According to the figures, there is "no reason to doubt that the Fed will soon tighten interest rates again and will continue to do so in the further course of 2022 and at the beginning of 2023," according to Helaba's market strategists.
However, Fed Governor Christopher Waller said late Thursday that he did not expect the jobs report to change the central bank's perspective. The job report shouldn't change the fact that "we should be 100 percent focused on reducing inflation." John Porter, Chief Investment Officer at Newton Investment Management, also assumed that the report was just “a piece of the puzzle”: “We are not sure whether the number of jobs will be an important economic data that investors will be aware of for longer than a year remembered for a day or two."
All sectors posted price losses, with the energy sector (-0.7%) holding up best thanks to soaring oil prices. The biggest loser was the IT sector (-4.1%).
Semiconductor stocks were sold after AMD issued a sales warning. Weaker demand for PCs is causing problems for the chip manufacturer. The company now expects sales in the quarter just ended to be well below the Group's previous forecast. The stock lost 13.9 percent. Other stocks in the industry such as Intel (-5.4%) or Nvidia (-8%) were also under pressure.
Levi Strauss (-11.7%) missed the consensus estimate with a small increase in sales of 1 percent, but beat it on adjusted profit. However, the company lowered the outlook due to the economic uncertainties.
The dollar rallied on the strong jobs data. The dollar index gained 0.5 percent. Bonds were sold on speculation that interest rates would be tightened. The 10-year yield rose 6.4 basis points to 3.89 percent.
Oil prices continued to soar, still benefiting from Opec's cuts. It had cut the daily production quota by 2 million barrels this week.
Gold was out of favor due to rising bond yields and the strong dollar. The troy ounce fell 0.9 percent and slipped just below the $1,700 mark again.
