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Wall Street Soars: S&P and Nasdaq Hit New Highs Amid Bullish Job Reports

Market Update - Daniel Ang The Accidental Trader Traders Academy International 11

Wall Street witnessed a remarkable uptrend last week, propelled by a strong jobs report, signaling robust economic health and reshaping expectations for the Federal Reserve’s rate cut timeline.

Key Points:

  • 📈 S&P and Nasdaq Reach Peak Levels: Both indices achieved their highest levels since early 2022, marking a significant bullish trend in the market.
  • 💼 Job Market Triumphs: The U.S. economy outperformed expectations by adding 199,000 jobs in November, hinting at a resilient labor market.
  • 🌐 Global Currency Shifts: The dollar strengthened following robust job data, while the Japanese Yen surged, reflecting changes in global foreign exchange markets.

In a week of financial optimism, Wall Street closed with notable gains, pushing the S&P 500 and Nasdaq to their highest levels since the early months of 2022. This bullish sentiment was largely fueled by an encouraging jobs report, bolstering optimism about the U.S. economy achieving a ‘soft landing’ despite ongoing challenges.

The Dow Jones Industrial Average saw a modest increase, adding more than 0.3%, while both the S&P 500 and Nasdaq rose by approximately 0.4%. Remarkably, the S&P 500 experienced its sixth consecutive week of gains, its longest streak since November 2019, and ended the week 0.2% higher. This continued ascent brings the index to its pinnacle since March 2022, with a notable 8.9% gain in November, categorizing it among the top 20 best-performing months since 1950.

The labor market provided a significant boost to market confidence. Last Friday’s non-farm payrolls report exceeded expectations, adding 199,000 jobs in November against a forecast of 180,000. This robust performance caused a shift in market bets regarding the Federal Reserve’s rate cut timeline, moving from March to May as the more likely time frame. Furthermore, the unemployment rate fell to 3.7%, challenging the earlier market expectations of an imminent Federal Reserve pivot to interest rate reductions in early 2024.

On Tuesday, traders anticipate weighing the latest Consumer Price Index (CPI) data against recent indicators of economic moderation, including the personal consumption expenditures price index, another significant inflation gauge.

In foreign exchange markets, the U.S. dollar rose, buoyed by the strong job growth data and a dip in the unemployment rate, suggesting underlying labor market strength. The Dollar Index was up 0.3% at 104.0, marking a modest weekly gain. In contrast, the Japanese Yen, after initially dropping post-jobs data, surged by up to 1.2%, adding to a significant rally on Thursday. This surge followed a statement from Bank of Japan Governor Kazuo Ueda, hinting at a potential end to the negative rates policy. Despite some dissipation of the Yen’s strength in European trading, it headed for its fourth weekly gain against the dollar.

Other currency pairs also showed movement, with EUR/USD falling 0.31% to 1.07585, and GBP/USD dropping 0.38% to 1.255. The AUD/USD similarly declined, falling 0.32% to 0.65795.

In the commodities sector, gold prices retreated below $2,000/oz briefly on Friday, influenced by the strengthening dollar and Treasury yields. Spot gold closed at $2,004.44/oz after touching a low of $1,994.49, while COMEX gold futures settled 1.6% lower at $2,014.50/oz.

Crude oil prices also experienced a notable rise of over 2%, following U.S. data supporting demand growth expectations. However, both Brent and West Texas Intermediate (WTI) crude futures fell for the seventh consecutive week, their longest streak of weekly declines in five years, due to persistent oversupply concerns. Brent crude futures settled at $75.84 a barrel, up 2.4%, and WTI crude futures at $71.23, up 2.7%.

In the realm of cryptocurrencies, Bitcoin (BTC/USD) rose 1.58% to $43,981, nearing its highest level since April 2022. It last traded at $43,730, indicating sustained interest in the digital currency market despite broader economic uncertainties.

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