Scott Wren, senior global market strategist at Wells Fargo Investment Institute, pointed to average wages for workers last month, which were a touch stronger than economists expected. While that’s good news for workers who would always like to make more, it could keep upward pressure on inflation.
“This report tells the Fed that they still need to be careful as sticky housing/shelter/wage data shows that it won’t be easy to engineer meaningfully lower inflation from here in the nearer term,” Wren said.
So, while traders are betting on an 85 per cent probability the Fed will ease its main rate in two weeks, they’re much less certain about how many more cuts it will deliver next year, according to data from CME Group.
For now, the hope is that the job market can help US shoppers continue to spend and keep the US economy out of a recession that had earlier seemed inevitable after the Fed began hiking interest rates swiftly to crush inflation.
Several retailers offered encouragement after delivering better-than-expected results for the latest quarter.
Ulta Beauty rallied 9 per cent after topping expectations for both profit and revenue. The opening of new stores helped boost its revenue, and it raised the bottom end of its forecasted range for sales over this full year.
Lululemon stretched 15.9 per cent higher following its own profit report. It said stronger sales outside the United States helped it in particular, and its earnings topped analysts’ expectations.
Retailers overall have been offering mixed signals on how resilient US shoppers can remain amid the slowing job market and still-high prices. Target gave a dour forecast for the holiday shopping season, for example, while Walmart gave a much more encouraging outlook.
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A report on Friday suggested sentiment among US consumers may be improving more than economists expected. The preliminary reading from the University of Michigan’s survey hit its highest level in seven months. The survey found a surge in buying for some products as consumers tried to get ahead of possible increases in price due to higher tariffs that President-elect Donald Trump has threatened.
In tech, Hewlett Packard Enterprise jumped 10.6 per cent for one of the S&P 500’s larger gains after reporting stronger profit and revenue than expected. Tech stocks were some of the market’s strongest this week, as Salesforce and other big companies talked up how much of a boost they’re getting from the artificial-intelligence boom.
All told, the S&P 500 rose 15.16 points to 6,090.27. The Dow dipped 123.19 to 44,642.52, and the Nasdaq composite climbed 159.05 to 19,859.77.
In the bond market, the yield on the 10-year Treasury yield slipped to 4.15 per cent from 4.18 per cent late Thursday.
In stock markets abroad, France’s CAC 40 rose 1.3 per cent after French President Emmanuel Macron announced plans to stay in office until the end of his term and to name a new prime minister within days. Earlier this week, far-right and left-wing lawmakers approved a no-confidence motion due to budget disputes, forcing Prime Minister Michel Barnier and his cabinet to resign.
In Asia, stock indexes were mixed. They rallied 1.6 per cent in Hong Kong and 1 per cent in Shanghai ahead of an annual economic policy meeting scheduled for next week.
South Korea’s Kospi dropped 0.6 per cent as South Korea’s ruling party chief showed support for suspending the constitutional powers of President Yoon Suk Yeol after he declared martial law and then revoked that earlier this week. Yoon is facing calls to resign and may be impeached.
Bitcoin was sitting near $US101,500 after briefly bursting above $US103,000 to a record the day before.
AP
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