Fed Chair Powell acknowledged in a press conference on Wednesday that some slowing in the labor market will likely be required for inflation to continue its downward trajectory. Nonfarm payroll growth totaled 150,000 in October, data from the Bureau of Labor Statistics showed, while the unemployment rate rose to 3.9% from 3.8%. The unemployment rate now stands at its highest level since January 2022.
The S&P 500 rose nearly 1% Friday, heading into the afternoon trading session, alongside gains for the other major indexes. Yields on the 10-Year fell to 4.539%, down 12 basis points and off its recent peak of 5%, in another sign that the market anticipates the Fed is done with raising rates.
On Friday markets were pricing in a 95% chance the Fed doesn’t raise rates at its next meeting, according to the CME FedWatch Tool, up about 15% from a day prior.
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The US economy added a modest 150,000 jobs in October following an especially strong September report — but the ongoing auto workers and actors strikes both registered a hit to the jobs report last month as strike activity continues to weigh on growth.
According to data released by the Bureau of Labor Statistics Friday morning, employment in manufacturing decreased by 35,000 in October, reflecting a decline of 33,000 jobs in motor vehicles and parts “that was largely due to strike activity.” This was the first time the auto strike’s impact showed up in the monthly jobs report.
General Motors (GM) reached a tentative agreement with the United Auto Workers (UAW) union earlier this week, joining rivals Ford (F) and Stellantis (STLA).
UAW’s GM national committee will vote Friday on whether to send the tentative deal to its membership. The deal, once confirmed, effectively ends the bruising labor dispute that has brought the autos industry to a complete halt.
Coupled with jobs lost in the autos sector, employment in motion picture and sound recording industries decreased by another 5,000 as Hollywood actors remain firmly on the picket lines following the official conclusion of the nearly 150-day writers strike last month.
Employment in those industries fell by 7,000 in September and 17,000 in August, “reflecting the impact of labor disputes.” Since May, which is when the writers strike first began, employment in those industries has declined by 44,000.
The actors union, SAG-AFTRA, will meet with studios again on Friday as the two sides remain locked into heated negotiations.
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Stocks trending in morning trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page in morning trading on Friday:
Apple (AAPL): Shares of the iPhone maker fell by 2% Friday morning after quarterly earnings beat estimates but executives forecasted a cautious outlook for growth, saying it expects sales of iPads and wearables to “decelerate significantly.”
Block (SQ): The fintech company topped Wall Street estimates for both revenue and profits, sending the stock up by 14% Friday. Block also raised its full-year adjusted EBITDA forecast for 2023 and issued upbeat guidance for 2024.
DraftKings (DKNG): Shares rose by more than 7% during morning trading after the sports betting company posted better-than-expected third quarter results. Revenue of $790 million beat estimates of about $703 million. The company also raised its full-year revenue guidance.
Expedia (EXPE): The travel booking company surged 16% as investors celebrated a major earnings beat and record revenue that the company reported on Thursday after the bell.
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Carvana stock pops on surprise profit
Carvana (CNVA) shares shot up more than 4% on Friday after the online used car platform reported a surprise profit last quarter, even as the number of units sold declined year-over-year.
Yahoo Finance’s Ines Ferré reports:
The Tempe- Arizona based company posted adjusted earnings of $3.60 per share, versus estimates for a loss of 78 cents. Revenue of $2.77 billion came in line with expectations. The pre-owned car retailer’s total gross profit per unit, or GPU jumped 70% year-over-year to $5,952.
Analysts at DA Davison maintained a neutral rating on the stock and lowered their price target to $35 from $60, citing lower unit sales compared to last year. The number of units sold in the quarter totaled 80,987, about 6% higher than the prior quarter, but down 21% year-over-year.
The company expects a decline in retail units sold driven primarily by industry and seasonal patterns. Carvana has been aggressively focused on achieving profitability at the near term expense of growth.
The company, once a pandemic darling, laid off workers last year in an effort to cut costs and preserve cash. Shares reached a low of $3.55 in December 2022 amid speculation of bankruptcy.
The stock is a short seller favorite. In the first half of the year it soared 1000% to more than $50 per share, leaving short sellers with a $2 billion loss.
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Stocks rise as weaker jobs market suggest the Fed will pause rate hikes
Wall Street opened the day on a high note, as the market took new job data showing slowing growth as another sign the Fed is done with its tightening campaign, at least for now.
The S&P 500 (^GSPC) edged higher by 0.7%, while the Dow Jones Industrial Average (^DJI) increased 0.5% or roughly 160 points.The tech-heavy Nasdaq Composite (^IXIC) gained 0.6%.
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Stock futures spike after surprise cooling in jobs growth
Stocks on Wall Street moved firmly into the green before the bell on Friday after the US economy added fewer jobs than expected in October.
Dow Jones Industrial Average (^DJI) futures popped 0.50%, or 169 points, while S&P 500 (^GSPC) futures rose 0.52%. Contracts on the tech-heavy Nasdaq 100 (^NDX) added 0.38%, turning higher after trading in the red earlier in the morning.
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October jobs report shows slowdown in growth
The monthly labor report from the Bureau of Labor Statistics showed 150,000 nonfarm payrolls were added to the labor market in October, compared with the consensus estimate of 180,000 from economists surveyed by Bloomberg. It marks a fall in growth from the 334,000 reading in September.
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Tech stocks struggle with focus on Apple, jobs report
Tech stocks slipped amid muted trading on the major US stock gauges as investors assessed Apple’s cautious sales outlook and waited for the October US jobs report.
Futures on the tech-heavy Nasdaq 100 (^NDX) fell 0.19%, while S&P 500 (^GSPC) futures dropped 0.06%. Contracts on the Dow Jones Industrial Average (^DJI) were down 0.03%, or 29 points.
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Stocks jumped on Friday afternoon as investors weighed a cooling in jobs growth that could reinforce hopes that the Federal Reserve is done with its rate-hiking campaign.
The Dow Jones Industrial Average (^DJI) rose 0.7%, or nearly 250 points, while the S&P 500 (^GSPC) added 1%. The tech-heavy Nasdaq Composite (^IXIC) gained roughly 1.2%.
The US economy added 150,000 jobs in October, undershooting the 180,000 reading expected, with auto industry strikes a factor, the Bureau of Labor Statistics said. The unemployment rate ticked higher to 3.9%.
The health of the labor market is a key input for Fed policymakers, and the signs of a slowing economy should support the case for the central bank to hold off from another rate hike this year.
Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards
Tech stocks were recouping losses earlier in the morning after disappointing results from Apple (AAPL). While Apple’s earnings beat estimates in its quarterly report after the bell, the iPhone maker was cautious in its outlook for growth, saying it expects sales of iPads and wearables to “decelerate significantly.”
Investors are weighing what that could mean about the resilience of consumer, and whether the series of disappointing earnings this season might feed into the Fed’s assessment of how its tightening is dampening the economy.
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