New York stock market starts relieved by slowing wage growth

Yonhap Young-sook Correspondent at Yonhap Infomax = The New York stock market rose stronger than expected in the US employment report for December, but was relieved of the slowdown in wage growth. As of 10:18 am

on the 6th (US eastern time) on the New York Stock Exchange ( NYSE ), the Dow Jones 30 Industrial Average recorded 33,290.64, up 360.56 points (1.09%) from the battlefield.

The Standard & Poor’s ( S&P ) 500 Index rose 41.39 points (1.09%) from the battlefield to 3,849.49, and the Nasdaq Index jumped 89.00 points (0.86%) to 10,394.24.

Investors watched the US employment report and the remarks of Federal Reserve ( Fed ) officials.

According to the U.S. Department of Labor’s employment report released on the same day, U.S. nonfarm payrolls increased by 223,000 in December last year, exceeding market expectations.

According to the 스포츠토토 Wall Street Journal, economists expected a 200,000 job gain.

The unemployment rate for December was 3.5%, down from the previous revision of 3.6%. The 3.5% was the same level as July and September last year, the lowest level since 1969.

Hourly wages rose 0.3% from the previous month, slower than the 0.4% rise from the previous month, and rose 4.6% year-on-year, down from 4.8% the previous month. The 4.6% is the lowest since August 2021 and is 1 percentage point lower than the March high of 5.6%. The figure was lower than the market’s expectations of 0.4% from the previous month and 5.0% from the previous year.

Although the labor market still showed a strong figure, the previously announced private employment index predicted that employment would be strong in December to some extent, and as wage growth slowed, the stock market rose and government bond yields fell. Wage growth is one of the indicators the Fed has been watching to determine whether inflation risk is prolonged.

The US 10-year Treasury bond yield traded at around 3.69%, down about 2bp from the battlefield at this time, and the 2-year Treasury bond yield, which is sensitive to the Fed’s monetary policy, traded around 4.34%, over 11bp behind. This suggests that short-term interest rates are pricing in the possibility of slowing inflation and a subsequent slowdown in rate hikes by the Fed.

Economic indicators for the service sector also fell to their lowest level since May 2020, reinforcing this outlook. The Service Purchasing Managers’ Index ( PMI ) for December of the

Institute for Supply Management ( ISM ) announced on the same day was 49.6, down significantly from the market expectation of 55.1 compiled by the Wall Street Journal and 56.5 the previous month.

As the index fell below 50, which separates economic expansion from contraction, the service industry returned to contraction in 31 months after an expansion of 30 months. Inflation in the service sector is one of the Fed’s main concerns.

Investors are also keeping an eye on comments from Fed officials this afternoon.

On this day, Fed director Lisa Cook, Atlanta Fed President Raphiel Bostik, Richmond Fed President Thomas Barkin, and Kansas City Fed President Esther George are scheduled to give speeches one after another.

New York stock market experts diagnosed that investors are cheering for the slowdown in wage growth.

Michael Aaron, chief investment strategist at State Street Global Advisors, told CNBC , “What investors are all concerned about is that this indicator suggests that inflation is moving toward the Fed’s target.”

“That’s what investors are worried about, and average hourly wages suggest that inflation continues to slow. They’re excited about that,” he added.

European stock markets rose all at once.

Germany ‘s DAX index rose 0.36%, while the UK ‘s FTSE index rose 0.62%. The French CAC index rose 0.84%, while the pan-European STOXX600 index rose 0.84%.The index is up 0.63%.

International oil prices also rose.

The February price of West Texas Intermediate ( WTI ) rose 1.30% from the battlefield to $74.63 per barrel, and the March price of Brent crude rose 1.41% from the battlefield to $79.82 per barrel.