August 8, 2022

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Decline in Wall Street after new job numbers and further rise at the age of ten

Decline in Wall Street after new job numbers and further rise at the age of ten

Friday ended lower for all major indices on Wall Street. The S&P 500 and Nasdaq are down for the fourth consecutive day.

  • The broad S&P 500 index fell 0.41 percent.
  • The Dow Jones Industrial Average fell 0.01 percent.
  • The Nasdaq Technology Index fell 0.96 percent.

The decline in the Nasdaq on Friday increased in line with another increase in the ten-year-old United States, the interest rate on US government debt with a ten-year maturity. The ten-year-old got up Strong in the early days of 2022On Friday, the interest rate reached 1.8 percent, at its highest level.

An increase in long-term interest rates is often negative for so-called growth companies, which are companies that are priced based on future earnings. Therefore, the technology-based Nasdaq index often fluctuates in line with interest rates because many technology companies are considered growth companies.

In aggregate, the Nasdaq fell about 4.5 percent during the first five trading days of the year. Thus the index had its worst week since February 2021, CNBC wrote.

For the third day in a row, Tesla shares fell. On Friday, the stock fell 3.54 percent to $1,026.

Netflix shares fell 2.2 percent, while Microchip Technology Semiconductor Inc fell 3.9 percent.

Gamestop shares rose 7.31 percent. On Thursday, it was reported that the company plans to create a market for non-fungible tokens, often called NFTs.

Noise

On Friday afternoon, US labor market numbers, often referred to as “the hottest numbers of the month,” showed that fewer jobs were created than expected in December.

199,000 new jobs were created, while analysts expected job growth of 443,000 in advance.

Halfdan Grangaard, investment strategist at Handelsbanken, thinks the lower-than-expected numbers are easy to interpret as noise.

– At the same time that today’s numbers were lower than expected, the previous months were also revised upwards. Hence today’s numbers are hard to interpret as part of a trend, he says.

to November, growth adjusted upwards of 210,000 new jobsTo 240K, revised numbers appear on Friday.

The unemployment rate fell from 4.2 to 3.9 percent from November to December.

Gangård is more concerned with wage growth, which fell less than expected in December and is now close to five percent year over year.

Given the concerns about the inflation outlook and how it will affect monetary policy, it is likely that the market will pay more attention to this. If anything, today’s non-farm numbers support the fear of higher interest rates due to higher inflation, without the real economy indicating that interest rates should rise very quickly.

Although the growth was much lower than many expected up front, December was the 12th consecutive month of employment growth in the US. The survey, called Nonfarm Payrolls, shows the number of jobs created in all industries in the US labor market, with the exception of agriculture.

In a comment, Knut A. Magnussen, chief economist at DNB Markets, attributed the disappointing numbers to a labor shortage. It also indicates that revisions to the past two months offset weak growth in December.

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For his part, he points out that the marked decrease in unemployment poses a greater risk to continued high inflation.

– There is reason to believe that the Central Bank will be more eager to start raising interest rates after this report. The market is now writing on the first rate hike at the March meeting.

We follow closely

US employment numbers are often referred to as “the hottest numbers of the month,” because the numbers give an indication of how things are going in the world’s most important economy. The Federal Reserve (Fed) is following the numbers closely, and they are also being closely watched in financial markets around the world.

The first ‘Non-Farm Payroll’ of the year comes just days after the Fed I released the minutes of the meeting I held in December. The Fed was said to have been increasingly concerned about high inflation at the end of last year, At the same time as the announcement of higher interest rates and a faster cut of support purchases, the much discussed.

If high inflation continued, many Fed members were concerned that the central bank would be forced to take a “backlash,” the meeting minutes said. Some members of the interest rate committee imagine that the Fed may have to raise rates “earlier or at a faster pace” to keep pace with high inflation. (Conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using a link that leads directly to our pages. All or part of the Content may not be copied or otherwise used with written permission or as permitted by law. For additional terms look here.

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