The US stock market has witnessed a 2% gain on Friday after the positive trend in the job market considering many job sectors performed well in November.
US stocks reported a 2% gain on Friday. Much of the credit goes to the central bank policy as they have been focusing on providing a divergent policy. As we know, the stronger job scenario has worked in the favor of a Fed hike in December. Moreover, Mario Draghi, the president of the ECB, took a mild stand in his speech.
Uncertainty is Here to Stay
He stressed that the recent developments have washed away lots of uncertainty. And it’s a big relief for the market. Back in September, the Fed refused to raise the rates. The uncertainty has become more than relevant at the moment, especially after December 16th. He added that we will get to witness lots of debates on this in the coming months. On the other hand, Dollar Continues to Dominate Irrespective of Yuan’s Entry in to the Special Club.
What happened on Friday has really invigorated the market beyond one’s imagination. The week came to an end on a positive note. With a 0.08% gain this week, S&P also witnessed the positivity. Something similar happened to Dow Jones Industrial average as well. They witnessed a 0.3% gain in this week.
We can see that the index has had a positive run this week. As far as most gains concerned, Goldman Sachs is a big player as they contributed heavily.
As far as S&P is considered, they outdid their Sept 8 performance in this week. And that helped them to end it on a positive note.
As far the job trends are concerned, we are looking at a very positive trend which is going to continue like that for a while. Draghi’s take on the job market has energized many in the market.
As far as the initial reaction was concerned, many felt that more should have been done. It’s just that things cooled off the next day.
Unlimited quantitative easing was the offer of Mario Draghi. He said they have no plans to limit the tool deployment at all. As a result, USD Index saw a 1% gain in 98.5. Speaking of Euro, it maintained a $1.09 position.
Now let’s take a look at the US Stock exchange. The market closed sharply lower. Though Draghi’s offer, the market couldn’t meet the expectations. It fell short of the predicted growth stimulus. According to Draghi, we’ll get continued support from the ECB on the bond buying program. But that hasn’t brought considerable gains. There was a growing concern among investors that there would be hiking in rates from the Fed. This was expected since economy wasn’t particularly strong.
Thursday losses didn’t last for long, as stocks managed to bounce back on Friday. The strong job market has clearly helped the stock market to open strongly. Which sector reported maximum gains as far as the job market was concerned? Without any doubt construction witnessed maximum job gains. Moreover, we are looking at a very positive trend on the hourly earnings as well. Notably, Crude oil has crossed the $40 level and it’s not a good sign at all. This should raise alarms.
US stock index witnessed a very positive outcome after 8.30 am. It has clearly helped the stock market with the news of job creation. Increase in wages was also reported. We saw more jobs being created in September and October.