FX Careers

General Market Analysis | 05 October 2023

Stocks Bounce Back as Data Stalls – Nasdaq up 1.35%

US stock markets enjoyed a strong relief rally yesterday data showed some slowing in the US jobs market. The ADP jobs numbers came in weaker than expected and although this contrasted with Tuesday’s Jolts data, and we have non-farms at the end of the week, investors jumped on the chance to find some value. Tech stocks led the way higher with the Nasdaq closing, up 1.35%, followed by the S&P, up 0.81% and the Dow which finished the day 0.39% to the good. Treasury yields dropped down with the benchmark 10-year now around 4.73% having peaked at 4.88% earlier in the day and the dollar dropped off recent highs.

Jobs Still in Focus for Stock Traders

US stock markets experienced a good rally yesterday but they still look very vulnerable on the longer-term charts having taken consecutive hits over the last week’s trading and the latest FOMC rate update. Investors are coming to terms with the probability of interest rates remaining much higher for longer as the Fed remains resolutely hawkish in the face of ‘sticky’ inflation and a resilient jobs market. The Fed have been clear that they feel that the jobs data needs to drop off for inflation to come down and that is why we are seeing such strong moves after jobs data this week. In reality, the data sets we have seen so far are just a couple of amuse-bouches before the main course which comes out on Friday in the form of the non-farms numbers and the unemployment rate. If the moves that we have seen this week have been anything to go by, if we have a big miss on expectations on Friday expect fireworks in the market into the weekend.

Quieter Day Ahead with Traders Eyeing Non-Farms

Traders are expecting a quieter day ahead today as markets focus firmly on the end of the week and the non-farm payrolls data in the US. There is little on the event calendar today in the Asian session although Aussie traders will take note of the Trade Balance data out early in the session. Investor focus will move to the UK on the London open with the latest Construction PMI numbers due out and MPC member Broadbent speaking. The US session does give us another update on the jobs market in the US with the weekly unemployment claims numbers due out before the focus moves north of the border for the Canadian Ivey PMI data release.