Market News

The S&P 500, Nasdaq Composite and Nasdaq 100 are bouncing, but buyers still have key technical levels to reclaim.

Yesterday’s selloff left the major US stock indices in a deep hole. The Nasdaq 100 fell 6.36%, its biggest one-day decline since 2020, and the weakness spread well beyond the tech-heavy index. Along the way, the selling broke technical levels that buyers had leaned against. Those breaks matter today because some of the same levels that gave way on the way down are now the first hurdles on the climb back.

Today, the major indices are finding their footing. The bounce is welcome, but there is still work to do before buyers can start to wrestle back more control. The first test is what happens when the rebound reaches a level that…

The US dollar moved higher after the October jobs report came in stronger than expected. Nonfarm payrolls rose 165K versus the 65K estimate, September was revised up to 60K from 29K, and the net revision over the prior two months was +84K. The unemployment rate edged down to 4.1% from 4.2%, even as labor force participation ticked higher.

The wage numbers also got the market’s attention. Average hourly earnings rose 0.4% on the month and 3.1% from a year ago, both above expectations. There was some softness beneath the headline, with the U6 underemployment rate rising to 7.9% from 7.6% as more people worked part time for economic reasons. Still, the combination of stronger payrolls and firmer wages put a potential December Fed hike more in…

Al-Arabiya cited an Iranian source who says that Iran is responding positively to the latest proposals presented by mediators. Now Tehran is waiting for practical steps from Washington to build trust.

Oil is under pressure after this report and stocks are bid. The S&P 500 is up almost 1% and the Nasdaq nearly 2%.

• Prior was 46.3
• Current conditions vs 48.0 expected
• Expectations vs 49.5 expected
• One-year inflation vs 4.7% prior
• Five-year inflation vs 3.5% prior

The University of Michigan’s Surveys of Consumers is one of the oldest measures of US household sentiment but it's lost its lustre in financial markets due to readings that don't correspond with spending. The preliminary reading is released at 10 am ET in the first half of each month, based on interviews conducted over the preceding weeks. A final reading incorporating the full sample follows near the end of the month. The preliminary figure sometimes draws a market reaction because it’s the first look at the month.

The headline Index of Consumer Sentiment is built from questions about personal…

• Limited evidence of second-round effects
• Decision to raise rates preemptive in nature
• Activity and employment adding to demand at the margin
• Pipeline pressure in system from energy prices
• We are not going to repeat 2022 rate hiking cycle
• Nothing baked in for interest rates next year, outlook becomes more uncertain from Spring
• It's possible that the bank rate would stay on hold or even fall if we saw stalling of growth next year
• Key determinant will be the margin squeeze on companies and how companies react
• We are putting weight on pay bargaining, costs, pricing

Bank of England Chief Economist Huw Pill reiterated that there is still limited evidence of second-round effects from higher energy prices. He stressed that the recent decision to raise…

Life goes on after yesterday’s tumble in stocks. The Nasdaq 100 took the biggest hit, falling 6.36% for its worst day since March 2020. The selling went well beyond the tech-heavy index.

• Dow −3.4%

• S&P 500 −4.36%

• Nasdaq Composite −5.52%

• Nasdaq 100 −6.36%

There’s a bid in Nasdaq futures this morning, but the Dow is still under pressure and European shares are broadly lower. That makes the early bounce a mixed signal heading into the U.S. and Canadian jobs reports. The 10-year Treasury yield is also higher, near 4.86%. If payrolls surprise, I’ll watch whether yields and the dollar confirm the first move in stocks or whether that move fades. The tech selloff also carried into Asian trading. investingLive Asia-Pacific news wrap

The U.S. dollar is…

• Prior month -68.3K

Details:

• Employment change −4,700 vs +13,600 expected. Prior −68,000.

• Unemployment rate 6.7% vs 6.5% expected. Prior 6.5%.

• Employment rate 60.5% vs 60.6% in September.

• Average hourly wages +2.2% year over year vs +2.3% in September, before seasonal adjustment.

• Full time employment -18.1K vs -35.4K last month

• Part Time employment 13.4K v -32.9k last month 

October components compared with September

• Youth unemployment 13.7% vs 13.0%.

• Unemployment among people aged 55 and older 5.5% vs 5.3%.

• Educational services employment +15,000 vs −35,000.

• Alberta employment −24,000 vs +23,000.

• British Columbia employment +12,000 vs −20,000.

Canada’s October jobs report came in weaker than expected on both headline measures. Statistics Canada…

• Prior was +29K (revised to +60K)

• Two-month net revision +84K
• Unemployment rate 4.1% vs 4.2% expected
• Prior unemployment rate 4.2%
• Unrounded unemployment 4.141% vs 4.1753% prior
• Participation rate 61.9% vs 61.8% prior
• U6 underemployment rate 7.9% vs 7.6% prior
• Average hourly earnings +0.4% m/m vs +0.3% expected
• Average hourly earnings 3.1% y/y vs +2.9% expected
• Average weekly hours 34.4 vs 34.4 expected
• Change in private payrolls +159K vs +64K expected
• Prior private payrolls +46K (revised to +78K)
• Change in manufacturing payrolls 19K vs +5K expected
• Government payrolls +6K vs -17K prior
• Household survey +463K

This is a beat from bottom to top and the wage growth will certainly make the Fed look twice. They will get another jobs report before the…

What's expected:

• Consensus estimate +65K (range +50K to +125K)

• September +29K

• August +133K

• July -10K

• Private consensus estimate +64K

• Unemployment rate consensus estimate: 4.2% vs 4.2% prior

• Participation rate 61.8% prior

• Prior underemployment U6 prior 7.6%

• Avg hourly earnings y/y exp +2.9% y/y vs +3.0% prior

• Avg hourly earnings m/m exp +0.3% vs +0.1% prior

• Avg weekly hours exp 34.4 vs 34.4 prior

October jobs so far:

• ADP employment report +86K vs +67K expected and +86K prior

• ISM services employment 51.4 vs 50.1 prior

• ISM manufacturing employment 52.4 vs 52.0 exp and 52.7 prior

• Challenger Job Cuts 43,994 vs 43,281 prior

• Philly employment +9.1 vs +11.8 prior

• Empire employment +10.3 vs +10.6 prior

• Initial jobless claims survey week 194K vs 196K last…

Articles:

• Zcash resists crypto market selloff as network upgrade goes live. What's next?
• US-Iran uncertainty keeps the downside in oil limited as markets await further developments
• Eurozone retail sales fall 0.7% in September, signalling weakening consumer demand
• Risk-off wave hits Bitcoin as tech stocks lead global selloff. What's next?
• Fed's Williams says US economy remains resilient, appropriate time to gather more information
• Newmont stock breaks out of a two-month downtrend. But buyers have a test to pass.
• A welcome change for gold as tech selloff fails to spark heavy liquidation, breaking the recent pattern
• investingLive Asia-pacific news wrap: Global tech stocks rout raises growth concerns
• FX option expiries for 6 November 10am New York cut
• <a href="https://investinglive.com/stocks/nasdaq-analysis-after-yesterday-s-crash-is-this-the-dip-investors-have-been-waiting-for"…

Zcash showed notable resilience yesterday amid the rout in the crypto market. The NU7 network upgrade might have provided some support. As a reminder, the upgrade reduces block times from 75 seconds to 25 seconds, making payments three times faster.

It will also disable older Sprout transaction pools and introduce a Network Sustainability Mechanism aimed at supporting the network's long-term funding. This is an important milestone for Zcash's development.

Nevertheless, the macro headwinds will continue to limit the upside. The Democratic Congress is expected to limit fiscal expansion and bring tighter regulation and restriction on AI infrastructure. Since the US economy…

Crude oil trimmed some losses yesterday as the market seems to have realised that Trump can still legally continue military operations against Iran even if Democrats control Congress.

The US-Iran situation remains mostly unchanged. Trump said that he has to decide whether to take further action against Tehran, while adding that he would prefer not to destroy the rest of Iran.

According to Axios, Trump met with his national security team before making the comments, while CENTCOM is reportedly finalising preparations for potentially resuming major combat operations. However, no new directive has been issued.

Meanwhile, the diplomatic efforts continue. Iran reportedly submitted a…