Stocks Rise In The Volatile Trade, But The Dollar Performs Lower Than Expectations
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Stocks rose on Friday following data indicating that the U.S. economy is creating more jobs despite the increasing level of inflation. However, the data also showed that the level of job creation has dropped in the past few days, which has prompted the Fed to continue with its high rate hikes.
The Bureau of Labor Statistics reported that in October, 261,000 workers joined the no-farm payrolls. This is higher than the 200,000 expectations for the month. But while the employment rate increased, the unemployment rate increased as well. The rate rose to 3.7%, indicating that some of the tightness in the labor market could drop.
The Dollar Fell Against Major Currencies
Meanwhile, wages witnessed a slight surge of 4.7% last month compared to their levels at the same time last year. This comes after a 5% surge in September. While stocks rose in volatile trade, the dollar fell against major currencies.
Chief Market economist at New York-based Spartan Capital Securities, Peter Cardilo, noted that there are indications that wage inflation has peaked. The number could come down as the economy moves closer to recession.
It’s also a strong indication that things might become messier as the recession looms. Generally, wages do not rise in a recession, which means the present surge in wages could be the last one in several months to come.
The MSCI index of global shares surged slightly by 0.6% on the same day, displacing two straight days of losses. But the gain was not enough to write off the -3% weekly loss after more rate hikes from the Bank of England and the Fed.
U.S. stock index increased by 0.7% – 0.9%, which is slightly higher than the 0.6% – 0.8% gain earlier on.
The Chinese Government Sets To Discuss COVID Restrictions
There were indications from China that the government could relax its COVID restrictions. The report increased investors’ risk appetite as they managed to hold on to their stocks.
China is looking to make notable adjustments to its “dynamic-zero” COVID-19 policy in the next few months. A press conference has been scheduled to hold on Saturday as the Chinese health authorities plan to discuss more preventive measures against the spread of the virus.
