FTSE 100 Live: Big failure for US non-farm payrolls increases shares as oil hits new high

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Data on employment in the United States is insufficient

A big mistake in US jobs data sent stocks on both sides of the Atlantic soaring this afternoon as investors bet on a delay in the Federal Reserve’s cut in stimulus packages. several trillions of dollars.

The closely watched Labor Department’s Non-Farm Wages report showed hires increased by 194,000 jobs last month, far less than the 500,000 jobs expected by Wall Street analysts.

While the unemployment rate fell to 4.8% from 5.2% in August, the average hourly wage rose 0.6% more than expected.

Fed Chairman Jerome Powell said it would take a reasonably good jobs report to hit the central bank’s threshold and start cutting its massive bond purchase program as early as November.

At 9 a.m. ET (2 p.m. UK time), Dow e-minis were up 11 points, or 0.03%, S&P 500 e-minis were up 9.75 points, or 0, 22%, and the Nasdaq 100 e-minis were up 83.25 points, or 0.56%. .

In London, the FTSE 100 reversed its morning drop to rebound 30 points to 7105p.

The dollar fell sharply against the ailing euro and pound sterling, just as it did after weak August employment data was released a month ago.

Hinesh Patel, portfolio manager at Quilter Investors, said: “After the big failure in August, the US job market suffered another big failure in September.

“As we have seen at times during the pandemic, there is a great asymmetry in what is good and bad for the economy and the markets. Bad news for the economy could well be seen as good news for the markets.

“The fact that job growth is well below expectations can be interpreted as meaning that the Fed’s starting line for tapering could be pushed a little further.”

Ryan Detrick, chief market strategist at LPL Financial, said: “This low number doesn’t push the Fed to have to cut sooner. It could be December now compared to November, but it probably doesn’t rock the boat too much. and it is likely that it decreases will still take place later this year.

The numbers follow a temporary reprieve after the US Senate agreed last night to raise the federal government’s debt limit by $ 28.4 trillion, avoiding fears of a possible US default,

High-growth stocks Apple Inc, Google-parent Alphabet, Amazon.com Inc and Tesla edged up, boosting futures on the Nasdaq.

Energy companies including Chevron Corp and Exxon Mobil Corp gained about 0.3%, following crude prices, while major US lenders fell as the benchmark 10-year yield weakened after the data on employment.

Richard Hunter of Interactive Investor said, “The US economy has suffered in recent months due to a combination of factors ranging from a slight increase in Delta variant cases to supply chain and job shortages. “Another color will be given on the state of the nation next week, when the third quarter reporting season begins in earnest, as the banks report.

“Investors will focus on any high commission income as a result of increased M&A activity, new bad debt discharges, levels of loan appetite and trading profits after a volatile quarter.”


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