Wall Street opens lower, hurt by strong jobs numbers

The New York Stock Exchange opened lower on Friday, hurt by employment figures which testify to the resistance of the American economy, likely to encourage the American central bank (Fed) to continue its brutal monetary tightening.

Around 2:45 p.m. GMT, the Dow Jones gave up 1.07%, the Nasdaq index dropped 1.87%, and the broader S&P 500 index, 1.38%. The three indices were approaching their lows for the year, established at the end of last week.

The American economy created 263,000 jobs in September, against 315,000 in August, slightly less than the 275,000 announced by economists. But the market has mainly retained the robustness of the American economy, which is resisting the hike in Fed rates and the expected slowdown in demand.

“Those numbers were solid,” said Peter Cardillo of Spartan Capital, who noted the slowdown in wage growth year on year. “It does not change the trajectory of the Fed, which will probably raise its rate by 0.75 points in November.”

For Peter Boockvar, of Bleakley Financial Group, “if the data is close to what was expected, the market is obsessed with the drop in the unemployment rate and what it means for the Fed”. This rate actually came out at 3.5%, against 3.7% expected and 3.7% also in August.

“The market’s negative reaction underscores that inflationary pressures are not abating fast enough for it to convince itself that the Fed is close to a rate peak,” added Quincy Krosby of LPL Financial.

Immediately after the publication, the operators also recalibrated their forecasts for the evolution of the Fed’s rates.

They now assign more than a third probability to the scenario of a range between 4.75% and 5.00% at least by next March, compared to 3.00% to 3.25% currently.

In the wake of the jobs report, the yield on 2-year US government bonds, which is more representative of investors’ monetary policy expectations than the 10-year rate, took off to 4.34%, against 4.25% the day before, and came close to the 15-year high established at the end of September.

The rates at 10 also rose, to 3.88%, against 3.82% on Thursday.

On the odds, Twitter fell back slightly (-1.90% to 48.45 dollars), the day after a Delaware judge’s decision to suspend his legal action against Elon Musk until October 28 to allow time the parties to eventually agree on the purchase of the platform by the entrepreneur.

Before this decision, the group with the blue bird had refused to give up its litigation, as requested by the boss of Tesla, who assured that he wanted to acquire the social network again.

Tesla fell back more frankly (-2.94% to 231.12 dollars), investors living badly the multiple twists of the Twitter saga and the uncertainty it poses to Elon Musk.

Jean icon Levi Strauss lost several sizes on Friday (-5.15% to $15.11) after revising its profit and revenue target for its full fiscal year 2022 on Thursday. .

The group justified this warning by unfavorable exchange rate effects and “more cautious” forecasts on its European and American markets.

Another warning, that of the semiconductor manufacturer AMD (-7.25% to 62.93 dollars), which expects a turnover much lower than expected in the third quarter, weighed down by the weakening of the demand for PC computers, coupled with “significant” destocking which reduced the volumes ordered from the company in Santa Clara (California).

AMD took its competitors in its fall, from Intel (-4.19%) to Nvidia (-4.29%).

Beyond that, the idea of ​​maintaining the course of the Fed penalized the entire technology sector, including the flagships Apple (-2.28%), Microsoft (-3.15%) or Alphabet (-1.51 %).

The prospect of an increase in the cost of money directly affects the world of tech, whose companies have significant needs for funds to finance their growth.