Ten-year yields highest since 2007 on strong jobs report
October 6, 2023
three themes: curve steepens, oil eases & US jobs loom
October 9, 2023The New York Stock Exchange ended slightly lower on Thursday, cautiously before the publication on Friday of a monthly report on employment in the United States, but the market managed to limit its losses thanks to the consolidation of bond rates.
The Dow Jones finished close to balance (-0.03%), the Nasdaq index lost 0.12% and the broader S&P 500 index lost 0.13%.
The Dow Jones fell by more than half a percent during the session, before recovering, even briefly turning green.
“The market has recouped its losses thanks to the decline in bond rates and the dollar,” commented Peter Cardillo of Spartan Capital.
The yield on 10-year US government bonds stood at 4.71%, compared to 4.73% the day before at closing.
The greenback, for its part, crumbled a little for the second day in a row against most of the major world currencies.
The poor start to the session was, in part, due to an indicator, according to which the United States recorded 207,000 new unemployment claims, less than the 210,000 expected by economists.
“Despite the offensive policy of the Fed (American central bank) to cool the labor market, companies are not laying off workers,” concluded Rubeela Farooqi.
Overall, operators played it safe on Thursday, awaiting the publication of the American employment report for September on Friday.
After the figure from the ADP firm, which reported on Wednesday 89,000 job creations in the private sector, much less than the 150,000 anticipated, investors are preparing for a decline. “If it showed signs of weakening of the labor market, it would be positive and could support stocks,” announces Peter Cardillo.
On the stock market, Rivian shares plunged (-22.88%), the day after the announcement, after market trading, of an issue of bonds convertible into shares for a total of $1.5 billion.
“Rivian continues to gobble up cash at an alarming rate and is still very far from profitability,” CFRA analyst Garrett Nelson wrote in a note.
ExxonMobil (-2.55%) paid for the further decline in crude prices on Thursday, although it had announced the day before that its profit would be up in the third quarter compared to the previous three months.
Alibaba fell (-0.49%), after the publication of information from the Financial Times according to which Belgian authorities are investigating possible espionage linked to the logistics entity of the Chinese group.
Coca-Cola (-4.83%), McDonald’s (-1.40%) and PepsiCo (-5.22%) suffered, as investors worry about the effect of new treatments against obesity, notably the star drugs Ozempic and Wegovy from the Novo Nordisk laboratory, which reduce the appetite for sweet or fatty foods.
The cleaning products group Clorox (-5.23%) lost its footing after warning that its quarterly turnover would be down by 23% to 28%, mainly due to a cyberattack which disrupted its device production since August.
Investors welcomed the new forecast published Thursday by Dell (-1.50%), the computer manufacturer counting on 3 to 4% annual growth in the long term.
BlackBerry plunged (-11.24%) after reporting on Wednesday a possible split of its data collection activity via connected objects,
