Daily Digest: Friday 4th October
Europe
European market activity was somewhat muted through the morning as traders awaited US non-farm data for September. Non-Farm Payrolls act as an effective proxy for economic growth amongst economists, market commentators and traders, serving as a leading indicator for inflation, and subsequently the direction of interest rate policy. Printed on the first Friday of every month, NFP highlights the interconnectedness of global markets, notably the relationship between global assets and US inflation and interest rates. The FTSE 100 (FTSE) closed the session 1.89 points lower (0.023%) at 8,280.63, while the Pan-European STOXX 600 (STOXX) headed higher rising 2.27 points (0.44%) to 518.56.
USA
As noted, US non-farm payroll data for September printed on Friday. Ideally, analysts would have liked new job creation figures in the range of 120,000 to 160,000, with the consensus estimate sitting around 147,000. However, final figures came in hot, with non-farm employment rising by 254,000, over 100,000 additional jobs above expectations. This suggests that the Fed’s 50 basis point interest rate cut at the end of last month may have been pre-emptive and overly aggressive. In the simplest form, a rise in non-farm employment signals economic strength as jobs are created and filled at a faster pace, and subsequently disposable income and consumer expenditure within the economy rises. Although it may seem positive, there are a number of issues associated with higher job creation, most importantly an increase in pressure on inflation, which if left unchecked, could prompt a central bank monetary policy pivot. Early equity movements were positive, the Nasdaq 100 ($NDX) saw the strongest gains, rising 241.67 points (1.22%) to 20,035.02, while the S&P 500 ($SPX) rose 51.13 points (0.9%) to 5,751.07, and the Dow ($INDU) rose 341.16 points (0.81%) to 42,352.75.
Rest of the World
Japanese equities continued higher for a second session running, as the Nikkei 225 (¥N225) rose a further 83.56 points (0.22%) to 38,635.62.
Once again, Chinese markets were closed as National Day celebrations continue. The Shanghai Stock Exchange Composite Index (¥SSE) will resume trading next week, opening at 3,336.50.
Sources:
https://uk.finance.yahoo.com/world-indices/
https://uk.finance.yahoo.com/commodities
https://www.londonstockexchange.com/indices/ftse-100
https://www.binance.com/en-GB/price/bitcoin
https://www.binance.com/en-GB/price/ethereum
https://qontigo.com/index/sxxp/
Stock Market Activity Today & Latest Stock Market Trends | Nasdaq
https://coinmarketcap.com/charts/#market-cap
https://www.forexfactory.com
Definitions:
YoY - Year on Year, or, Year over Year
MoM - Month on Month, or, Month over Month
QoQ - Quarter on Quarter, or, Quarter over Quarter
ECB - European Central Bank
BOJ - Bank of Japan
Fed - Federal Reserve
BOE - Bank of England
SNB - Swiss National Bank
DOJ - Department of Justice