Market Brief: Solid NFP Report Pumps Up Risk Appetite

Matt Weller
By :  ,  Head of Market Research

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  • The October Non-Farm Payrolls report printed at 128k, above economists’ expectations (especially accounting for the nearly +100k positive revision to previous readings). While wage data came in a tick soft, last month’s earnings figures were revised up by +0.4% m/m, suggesting that the US labor market remains generally strong. Separately, the ISM Manufacturing PMI report missed expectations and remained in contractionary territory for the third straight month.
  • FX: In a typical risk-on configuration, the growth-sensitive New Zealand dollar was the strongest major currency, with the safe haven Japanese yen bringing up the rear.
  • Commodities: Oil surged nearly 4% today to extend its recent streak of volatility; gold was essentially flat.
  • See the key data and market themes we’ll be watching in the coming week!
  • US indices closed roughly 1% higher across the board to hit new record highs, reassured by the solid NFP report and continued optimism about a potential US-China “Phase One” trade deal.
  • Energy (XLE) was the strongest sector, boosted by the big rally in oil prices. REITs (XLRE) were the weakest.
  • Stocks on the move:
    • Alibaba (BABA, -0%) reported strong adjusted earnings of RMB 13.10 per share, up more than 30% from last year. Despite beating both earnings and revenue estimates, the stock finished the day essentially flat.
    • Exxon Mobil (XOM) tacked on 3% despite a 50% drop in earnings as the company reported better-than-expected revenue amidst falling oil prices. Rival Chevron (CVX, +0%) was essentially unchanged on the day after missing analysts’ EPS and revenue estimates.
    • Pinterest (PINS) shed -17% today after yesterday’s disappointing revenue figures.
    • US Steel (X) reported a loss this quarter, but beat revenue expectations, leading the stock to rise 15% on the day.
    • Warren Buffett’s Berkshire Hathaway (BRK.B, +2%) reports earnings over the weekend.
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