(Bloomberg) – US stocks have fluctuated and Treasury yields have risen as weak employment data has turned bets on Federal Reserve policy plans.
The S&P 500 won and the Nasdaq 100 changed little after data showed employers were adding far fewer jobs than expected last month. While the report is unlikely to dissuade the Fed from announcing cuts to its bond purchases next month, it could remove pressure on the central bank to raise interest rates anytime soon.
The 10-year Treasury yield rose to 1.6%, continuing a rally in anticipation of fewer Fed asset purchases. Gold has jumped. The dollar was flat. And crude oil topped $ 80 a barrel in New York City for the first time since 2014.
“It seems to me the market is saying that’s pretty good, a decent report,” said Kathy Jones, chief fixed income strategist for the Schwab Center for Financial Research. “Overall it’s a decent enough report for the Fed to go ahead and downsize, so I don’t think that has changed expectations significantly.”
The monthly job shortage was the second in a row, signaling a weak labor market as the Fed prepares to cut stimulus. The biggest job losses in the report came from the government sector as hires in leisure and hospitality nearly doubled, suggesting the business outlook is strengthening, albeit slowly.
“It certainly has a delta variant characteristic,” Jeffrey Rosenberg, senior systematic fixed income portfolio manager at BlackRock Financial, said Thursday in an interview with Bloomberg TV’s “Watch”. “The major disappointing industry sectors here that point to the delta variant are leisure and hospitality —— and education numbers.”
Payrolls for September were the smallest advance of the year after an upward revision to August numbers. Meanwhile, the unemployment rate fell to 4.8% and the average hourly wage jumped.
“The jury is out on how the market will interpret the data,” said Mike Loewengart, managing director of investment strategy at E * Trade Financial. “On the one hand, this is a blow to our economic recovery, on the other hand, the postponement of Fed policy means that the era of easy money continues.”
For more market analysis, read our MLIV blog.
Some of the main movements in the markets:
- The S&P 500 rose 0.2% at 10:11 a.m. New York time
- The Nasdaq 100 has changed little
- The Dow Jones Industrial Average has changed little
- The Stoxx Europe 600 is down 0.2%
- The MSCI World index rose 0.2%
- The Bloomberg Dollar Spot Index changed little
- The euro rose 0.1% to $ 1.1569
- The British pound rose 0.1% to $ 1.3639
- The Japanese yen fell 0.3% to 111.94 per dollar
- The yield on 10-year treasury bills rose three basis points to 1.60%
- German 10-year rate rose three basis points to -0.16%
- UK 10-year yield rose seven basis points to 1.15%
- West Texas Intermediate crude rose 2.1% to $ 79.91 a barrel
- Gold futures rose 0.4% to $ 1,766.50 an ounce
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