The US Stock Market Soars on Strong Jobs Report
Investors breathed a sigh of relief on Friday as the US stock market closed higher, with the Nasdaq posting significant gains following a stronger-than-expected jobs report. Concerns about a weakening economy were assuaged by the positive data. As we head into a potentially volatile earnings season for companies, optimistic investors are hopeful that robust results will justify the lofty valuations in a US stock market hovering near record highs.
Key Highlights:
- The S&P 500 rose by 0.9%, while the tech-heavy Nasdaq and the Dow Jones Industrial Average climbed by 1.2% and 0.8%, respectively.
- Unemployment in the US dropped to 4.1%, with the largest increase in employment in six months.
Commodities Rally Amid Geopolitical Tensions
Commodities saw widespread gains as oil prices surged on Friday, marking their biggest weekly gains in over a year due to escalating tensions in the Middle East. However, President Joe Biden’s caution to Israel against targeting Iran’s oil facilities tempered the rise in prices. The threat of a larger conflict in the region has oil analysts warning of potential consequences.
Oil Market Analysis:
- Iran’s OPEC membership and daily oil production of 3.2 million barrels make it a significant player in global oil markets.
- Libya’s resolution of a leadership dispute eased delivery concerns, contributing to the stability of oil prices.
Metal Markets Show Strength
Base metals also trended upward, with zinc leading the pack with a 1.7% increase. Gold prices, however, fell due to an unexpectedly positive US jobs report, diminishing expectations of aggressive interest rate cuts by the Federal Reserve next month.
Stock Market Highlights:
- Ubisoft’s stock surged 33.5% on news of a potential acquisition by Tencent.
- Nvidia and Tesla registered gains of 1.7% and 3.9%, respectively, while Sage Therapeutics saw a 5.0% decline.
Global Market Updates
Asian stocks surged and the dollar strengthened against the yen on Monday following strong US labor market data that dispelled recession fears. The Nikkei in Japan led regional gains, boosted further by a weaker yen. Meanwhile, the Hang Seng in Hong Kong remained closed for the Golden Week holiday.
Stock Market Recommendations:
- Pareto Securities raised ABB’s target price to 670 kronor and reiterated a buy recommendation.
- UBS lowered Volvo Cars’ target price to 24 kronor and maintained a sell recommendation.
- Barclays upgraded Stora Enso to overweight with a target price of 14 euros.
- DNB reiterated a buy recommendation for Skanska and raised the target price to 260 kronor.
Market Outlook for the Day
With a relatively quiet macroeconomic calendar, investors will be closely watching housing price data from Halifax and Germany’s industrial orders for September. Meetings in the Eurogroup are scheduled for midday, providing further insight into market sentiment.