(New York) The New York Stock Exchange opened higher on Friday, unfazed by a much higher than expected number of job creations in May in the United States, nuanced by the increase in unemployment, and reassured by the resolution of the debt crisis after a decisive vote in the Senate.
By 9:55 a.m. EST, the Dow Jones was up 1.19%, the NASDAQ index was up 0.67%, and the broader S
The U.S. economy added 339,000 jobs in May, nearly double the figure projected by economists (190,000).
The data was enough to tense Wall Street, because it could reflect the persistence of inflationary pressures, likely to encourage the American central bank (Fed) to continue its cycle of monetary tightening.
But the impression was tempered by the larger-than-expected rise in the unemployment rate, to 3.7% from 3.4% in April, as well as the deceleration in the pace of average wage growth, to 0.3% over one month compared to 0.4% previously.
This latest information “will give the Fed room to keep rates unchanged at its next meeting” on June 13-14, Rubeela Farooqi of High Frequency Economics said in a note.
“The reaction (to the report) hasn’t been horrible,” noted Karl Haeling of LBBW, in part because “the jump in unemployment was not expected.”
For Patrick O’Hare of Briefing.com, a wind of “optimism” is blowing through the market, seduced by the idea that “the economy can avoid a recession thanks to the continued strength of its labor market”.
The analyst also attributed the direction of the market to the vote in the Senate, Thursday evening, of the text suspending the debt ceiling, which definitively rules out a default of payment by the United States in the short term.
The good employment figure and the end of this political crisis, which kept investors in suspense for several weeks, caused tension on the bond market.
If it has now acted on a monetary status quo this month, the New York market is now expecting an increase in July and sees the Fed’s key rate above 5% at the end of 2023, i.e. its current level.
In addition, to replenish its reserves after months of stringent management due to the debt impasse, the US Treasury will proceed with massive bond issues, which Karl Haeling estimates at 600 billion dollars.
By flooding the market with Treasury bonds, it will lower their prices and have to offer more attractive conditions, hence the tension on rates.
On Friday, the yield on 2-year US government bonds stood at 4.43%, against 4.34% the day before closing.
On the side, Amazon (2.01%) accelerated. The Bloomberg agency reported that the group would consider launching a mobile phone offer for its Prime subscribers, at low cost or even free.
Telephone operators took the news badly, AT
The Canadian sports equipment manufacturer Lululemon (13.71%), known for its high-end yoga pants, was off to a sprint after publishing, Thursday after the stock market, results that exceeded expectations and raised its annual forecasts. The group indicated that it had not seen a slowdown in demand, despite a deteriorating economic situation.
Semiconductor maker Broadcom was up 3.61% after posting slightly better-than-expected results. Chief executive Hock Tan has estimated that a quarter of the group’s revenue will come from so-called generative artificial intelligence next year.
The petrochemical groups DuPont de Nemours (5.71%) and Chemours (19.14%) advanced after the announcement on Friday of an amicable agreement with hundreds of local authorities who were claiming damages from them linked to the contamination of their water to perfluoroalkyl and polyfluoroalkyl, also called PFAS, nicknamed “eternal” pollutants.