Jobs Number Beats Expectations

November 6, 2020 08:15 AM
638,000 new jobs added in October
U.S. benchmarks surged higher this week
Economic activity and employment have picked up in recent months
Stock Market Update for Traders

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Thursday's Close

E-mini S&P 500 (December): Settled at 3404.75, up 69.85

E-mini Nasdaq-100 (December): Settled at 12,076.50, up 313.50

In one of the most fundamental weeks of the year, price action has been equally technical. Typically, such makes for a terrific trading environment. All things considered, the election has been decided in favor of former Vice President Biden, and the Federal Reserve stayed a narrow path. Nonfarm Payroll is now on deck. U.S. benchmarks surged higher this week not only as fundamental uncertainties were removed, but after the S&P technically held unchanged on the year one week ago. Furthermore, this week’s melt higher in each the S&P and NQ tested trend line resistance from their respective all-time highs yesterday, allowing for the tape to then consolidate into this morning’s critical jobs read at 7:30 am CT.

Expectations are for 600,000 jobs to have been created in October, the Unemployment Rate to tick down to 7.7% from 7.9%, and for Average Hourly Earnings to gain 0.2% MoM and 4.6% YoY. These are certainly stellar improvements, in line with the Federal Reserve’s statement yesterday; “Economic activity and employment have picked up in recent months but remain well below their levels at the beginning of the year.”

Fed Chair Powell has maintained that fiscal stimulus measures are necessary to combat the slow recovery and consistently low inflation. However, he added yesterday that the Federal Reserve had not exhausted their monetary “ammunition” and “powerful tools” remain.

Today’s jobs data is pivotal, risk-assets want to see an economic improvement, but the real inflection is quickly approaching. Once the dust from the election settles, can Congress come together and achieve new Coronavirus Aid legislation before yearend?

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