Investing.com – U.S. stock markets turned higher after opening mostly in the red on Friday, as investors digested a stronger than projected November jobs report.
By 10:07 ET (15:07 GMT), the benchmark , the 30-stock , and the tech-heavy had all climbed by 0.3%.
Nonfarm payrolls increased by 199,000 jobs last month after rising by 150,000 in October, according to data from the Labor Department’s Bureau of Labor Statistics (BLS). Economists had estimated that payrolls would climb by 180,000 roles. Job gains came from areas like health care and government in particular, the BLS said, while the end of protracted automotive industry strikes in November led to more positions in the manufacturing sector.
Average hourly earnings, a key gauge of wage growth, rose at a monthly pace of 0.4% versus October, accelerating from a previous reading of 0.2% and faster than predictions of 0.3%. The unemployment rate in the world’s largest economy, meanwhile, unexpectedly ticked down to 3.7%.
Friday’s data complicates an emerging narrative that the Fed’s unprecedented period of monetary policy tightening may be working to cool labor demand.
Earlier this week, separate figures showed that job openings touched an over 2-1/2-year low and fewer workers resigned from their positions in October, while private employers added less roles than anticipated last month. However, in a note to clients, analysts at Evercore ISI argued that the hints of a weak employment report suggested by these other data points were “not correct.”
Loosening the jobs market has been a major focus of the Fed’s move to lift borrowing costs to a range of 5.25% to 5.50% — the highest mark in more than two decades. In theory, a slowdown in demand for workers could alleviate some upward pressure on wages and, by extension, help achieve the Fed’s ultimate objective: defusing elevated inflation.
Bond yields rise, dollar strengthens after nonfarm payrolls report
Traders had been hoping that the payrolls numbers would provide more clues into when the Fed could begin slashing rates next year. According to the CME’s closely-monitored FedWatch Tool, the probability of a quarter-point reduction as soon as March dipped to just under 46% after the jobs update, down from a little over 55% just a day ago.
“This release should push rates and the dollar materially up,” analysts at Evercore ISI said in a note to clients.
The rate-sensitive and benchmark both advanced following the employment data. Bond prices typically fall as yields rise.
Meanwhile, the U.S. dollar strengthened, with the — a measure of the currency against a basket of its peers — and both inching higher.
In Europe, both the and the weakened against the greenback. Elsewhere, the dipped versus the dollar, and was set for mild weekly losses stemming from persistent concerns over sluggishness in the world’s second largest economy. Dollar selling by Chinese state banks has helped limit losses in the yuan this week.
Lululemon flags “prudent” fourth-quarter guidance
In corporate news, Lululemon Athletica (NASDAQ:) shares moved up despite the activewear group unveiled fourth-quarter revenue projections that missed consensus estimates.
Chief Financial Officer Meghan Frank noted that the company was taking a “prudent” approach to its outlook, although it was pleased with its Thanksgiving weekend sales.
DocuSign Inc (NASDAQ:) shares reversed earlier losses, even as the e-signature business presented a margin guidance that some analysts considered to be cautious.
Shares in Smith & Wesson Brands (NASDAQ:) tumbled after the gunmaker company reported earnings per share of $0.14 in the second quarter, below expectations.
Bluebird Bio (NASDAQ:) shares gained after analysts at Morgan Stanley improved their rating of the gene-therapy firm to “equal-weight” from “underweight.”
Elsewhere, oil prices climbed up from a near six-month low, as traders gauged how the strong jobs figures could factor into demand in the world’s largest crude consumer. At 10:01 ET, expiring in February had added 2.3% to $75.77 per barrel, while had risen by 2.8% to $71.10 a barrel.
Prices also gained some support after Saudi Arabia and Russia called on fellow members of the Organization of the Petroleum Exporting Countries and its allies — a group known as OPEC+ — to adhere to an agreement on output cuts made last week. Markets were initially underwhelmed with the voluntary nature of the reductions.
Oliver Gray contributed to this report.
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