[ad_1]
Stocks rose on Friday after the November jobs report and University of Michigan consumer survey data signaled a resilient economy and cooling inflation, fueling the so-called soft landing narrative that the Federal Reserve — and many investors — have been hoping for.
The Dow Jones Industrial Average gained 40 points, or 0.1%. The S&P 500 added 0.1%, earlier hitting a high of the session of 4,606.31 that put it within a point of its 2023 peak. The Nasdaq Composite rose 0.2%.
November’s nonfarm payrolls report showed an unexpected drop in the unemployment rate, with the yield on the 10-year Treasury last up by 10 basis points at 4.23%. (One basis point equals 0.01%.)
The jobless rate fell to 3.7% in November from 3.9% the prior month. It was expected to remain the same. The economy added 199,000 jobs, slightly ahead of the 190,000 estimate from Dow Jones and well ahead the 150,000 jobs added in October.
The data first raised concerns the economy was running too hot for inflation to cool enough for the Fed to start retreating from its high-rates policy. Some traders expect the Fed to start cutting rates as early as March.
On the other hand, the monthly jobs report could also support the notion that the Fed is guiding the U.S. economy toward a soft landing — a steady economic recovery amid falling inflation. Average hourly earnings, seen as a leading indicator of inflation, rose about as expected in November as the economy added more jobs than the prior month.
Meanwhile, a closely watched University of Michigan survey showed inflation expectations drop and consumer sentiment jump in December to it highest level since July.
“Those arguing for a soft-landing have the evidence to support them today, the only caveat being the economy may not be coming in for a landing at all, as it is still up in the air flying high,” said Christopher Rupkey, chief economist at FwdBonds. “Time will tell if this extended growth and moderate jobs creation reignite inflation pressures that force Fed officials to keep rates higher for longer next year.
The Fed will deliver its latest policy decision Wednesday.
For the week, the Nasdaq’s gained 0.6%, while the S&P is up 0.1%. The Dow is on pace for a 0.1% weekly loss.
In other news, Carrier Global shares jumped more than 5% on news that it’s selling a business unit to Honeywell. The industrial stock lost 2%. First Solar popped 5% on an upgrade from Morgan Stanley.
Correction: A previous version misstated the S&P 500’s week-to-date performance.
[ad_2]
Source link
