CURRENCY MARKET WRAP
As of Mon Oct 7th, Singapore Time zone UTC+8
U.S. Dollar Index, -0.05%, 98.81
USDJPY, +0.02%, $106.94
EURUSD, +0.11%, $1.0978
GBPUSD, +0.03%, $1.2333
USDCAD, -0.16%, $1.3316
AUDUSD, +0.40%, $0.6769
NZDUSD, +0.25%, $0.6318
U.S. trade deficit for August widened to $54.9 billion (consensus -$54.4 billion) from -$54.0 billion in July, as exports were $0.5 billion more than July exports while imports were $1.3 billion more than July imports. Trade continues to drag on GDP growth, evidenced by the average third quarter real trade deficit being 0.8% above the second quarter average.
U.S. economy added 136,000 jobs to non-farm payrolls in September, which was slightly below expectations (consensus 150,000) but also better than expected when accounting for the upward revisions in August and July. The unemployment rate hit a 50-year low at 3.5% (consensus 3.7%), while average hourly earnings were unchanged (consensus 0.3%).
Some pointed to no wage growth as a disappointment, but the modest jobs growth helped subdue this week’s general growth concerns. Powell also repeated his view that the U.S. economy is “in a good place.” The general sense of relief in the market helped the S&P 500 close above its 50-day moving average (2942).
U.S. Treasuries finished little changed despite the bullish bias in equities. The 2-yr yield increased one basis point to 1.39%, while the 10-yr yield declined basis points to 1.52%. The U.S. Dollar Index finished little changed at 99.81. WTI crude rose 0.6%, or $0.30, to $52.78/bbl.
STOCK MARKET WRAP
S&P500, +1.42%, 2,952.01
Nasdaq, +1.40%, 7,982.47
Nikkei Futures, +0.24%, 21,320.0
S&P 500 rose 1.42% on Friday, with buying momentum picking up after the release of the Employment Situation Report for September and continuing throughout the day. It was a broad-based rally, led by shares of financial and technology companies, although trading volume was lighter than usual.
All 11 S&P 500 sectors finished higher. Eight sectors finished up at least 1.0%, including noticeable gains in the financials (+1.9%) and information technology (+1.7%) sectors. Apple (AAPL 227.01, +6.19, +2.8%) carried the tech sector higher after the Nikkei Asian Review reported the company asked suppliers to increase production for the iPhone 11 by up to 10%.
HP (HPQ 16.64, -1.76, -9.6%) was left out of today’s rally. The company announced it will reduce its global headcount by 7,000 to 9,000 employees as part of a restructuring plan. HP also authorized a $5 billion share repurchase program and raised its dividend by 10%.