A better than expected jobs report released on Friday, December 6, was enough to send stocks higher at the close of this trading week. Economic fundamentals in the absence of rumors and statements about the US-China trade deal moved the financial markets. The actual number for the US non-farm payrolls was 266k, higher than the forecast of 183k. The US unemployment rate declined to 3.5%, beating the forecast of 3.6%, a 50-year low rate. The average hourly earnings grew to 3.1% on a yearly basis for the month of November 2019 compared to the forecast of 3.0%, but on a monthly basis declined to 0.2% compared to the forecast of 0.3%.
Furthermore, the University of Michigan Sentiment figure beat the forecast, with a figure of 99.2, higher than the forecast of 97.0. The US dollar appreciated against the Euro, but not much against the British Pound, and surprisingly not much against the Japanese Yen. After such a strong job report the sentiment for risk is mixed with investors focusing on safe havens such as the Japanese Yen. Gold prices declined, and WTI Crude oil closed above the $59 per barrel. Higher oil prices are a key indication for inflationary pressures on the economy.
For the week of December 2 – December 6, 2019 the major US stock market indices closed as follows:
• Dow Jones Industrial Average: Close 28,015.06, -0.13% for the week, +20.09% Year-to-date
• S&P 500 Index: Close 3145.91, +0.16% for the week, +25.49% Year-to-date
• NASDAQ: Close 8656.53, -0.10% for the week, + 30.36%, Year-to-date
• Russell 2000: Close 1633.84, +0.57% for the week, +21.15% Year-to-date
Weekly Stocks Gainers
These are the top 3 gainers, stocks with 5 days of consecutive price advances:
- Synthorx Inc (Nasdaq:THOR), Close 25.03, 5-day change +39.83%
- Champions Oncolog (Nasdaq:CSBR), Close 7.85, 5-day change +36.28%
- Vista Oil & Gas S.A.B. DE C.V. (NYSE:VIST), Close 7.40, %-day change +29.37%
Weekly Stock Losers
These are the top 3 losers, stocks with 5 days of consecutive price declines:
- Akers Biosciences (Nasdaq:AKER), Close 3.01, 5-day change -60.91%
- Neoleukin Therapeutics Inc (Nasdaq:NLTX), Close 4.06, 5-day change -27.24%
- Weidai Ltd ADR (NYSE:WEI), Close 4.33, 5-day change -27.23%
Stock Market Commentary
“Nonfarm payrolls in the US increased by 266 thousand in November 2019, following an upwardly revised 156 thousand rise in the previous month and easily beating market expectations of 180 thousand. It was the largest advance in payrolls since January, with notable job gains occurring in health care and in professional and technical services. Employment also increased in manufacturing, reflecting the return of workers from a GM strike.” Source: Trading Economics
Only the US non-farm payrolls figure for the month of January 2019, at 312K is higher than the most recent figure of 266K. This could be based on seasonality, beginning of the year and end of the year. In any case a very strong number for the jobs report seems very optimistic for the US economy, especially as optimism is confirmed with the better than expected figure for the University of Michigan Sentiment index.
Sources:
https://www.dailyfx.com/economic-calendar
https://quotes.wsj.com/index/US/COMP
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