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Markets bounce back after next US labour market surprise

Companies in the US added the lowest number of jobs in a month to their payrolls since early 2021 in a sign that the labour market could be cooling. Just a day earlier, however, job opening data painted a picture of the world’s largest economy in the need of workers. The mixed signals were enough for markets to rally mid-week after suffering heavy losses earlier in the week.

Shane Strowmatt, LGT
Temps de lecture
5 minutes
Market numbers
© Shutterstock

US companies added 89,000 employees to their payrolls in September, according to the ADP jobs report. That number was below market expectations and considerably lower than the 180,000 jobs added in August. This year, strong labour market data has consistently added to the trail of positive surprises out of the US by supporting consumer spending, a key component of the US economy. Wednesday’s data, however, surprised to the downside.

The weaker labour market data stopped the heavy losses of the previous day by supporting the thesis that the Federal Reserve is nearing the end of its hiking cycle. Yields on ten-year US government debt slipped after gaining 30 basis points just this week alone. Stock indices in New York also recovered midweek. The Dow Jones Industrial gained 0.4% and the S&P 500 finished the day up 0.8%. The Nasdaq-100 jumped nearly 1.5%.

In the Asia-Pacific region, stock markets continued with the positive sentiment out of the US. In Tokyo, the Nikkei 225 gained 1.8% and in South Korea, the Kospi was up 0.7%. In Australia, the S&P/ASX 200 was trading 0.6% higher on Thursday. Hong Kong's Hang Seng Index gained 0.7%, while markets in mainland China remained closed for a holiday week.

In the euro area, retail sales dropped more than market expectations in August. Retail sales in the eurozone fell 1.2% when compared with the previous month or 2.1% when compared with the same month a year earlier. The weak sales data is the latest sign that the euro economy is weakening rapidly as consumers struggle with high inflation. In the eurozone, consumer prices increased by 4.3% in September on a year-on-year basis. The Euro Stoxx 50 pulled off a mild gain of 0.1% on Wednesday.

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: German trade balance (08:00 CET), French industrial production (08:45), US weekly initial jobless claims (14:30), US trade balance (14:30).


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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.

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