The best performing sector in 3Q was utilities, which was the only one of 10 S&P 500 sectors to close the quarter in positive territory.
A disappointing employment report has emerged from the U.S. Labor Department on Friday, as non-farm payrolls added only 142,000 jobs in September, well below economists’ consensus forecast of 200,000. For example, the number of part-time workers seeking, but unable to find, full-time employment plummeted to 6.04 million, the lowest level in seven years. “The strong dollar is [also] weighing on US exports”, PNC Financial economist Gus Faucher tells NPR. Futures on the Dow Jones industrial average were down 190 points at 9 a.m. ET.
“Even if this might not have much impact on property prices, it shows the central government has policy intentions to boost GDP growth“, said Castor Pang, head of research at Core Pacific-Yamaichi in Hong Kong.
“Any time crude rallies nowadays it’s good for the overall market“, he said. Shares in Australia fell 1.2%. Yields fall as bond prices rise. They’ve posted a 2 percent gain on average since the current expansion began in mid-2009.
The data also knocked the dollar lower – the pound rose 0.6% to $1.5238 after the numbers were released. Before the data release, the index had been up 1.5%.
The U.S. Federal Reserve has been watching job growth closely as it decides whether to raise its key interest rate for the first time in nearly a decade.
“There’s more of a reason to put money into assets that have growth”, said Ian Winer, director of equity trading at Wedbush Securities, adding that biotechnology stocks, a high-growth area of the stock market, posted gains on Friday.
But a single jobs report isn’t the only thing weighing on the Fed’s mind.
The Stoxx Europe 600 gained 0.5%. “The chatter on the floor as soon as it came out was you heard a lot of groans, and yells, and oh my gosh’s”, he said. General Electric (NYSE:GE) has been busy trumpeting moving jobs out of the U.S. General Electric and Boeing have been vocal critics of Congress’ decision not to renew the Export-Import Bank’s charter.
The unemployment rate remained unchanged at 5.1 percent. The odds were 27% for the December. 15-16 meeting, compared with 44% before the data.
“(They) show just how sluggish growth has become in the manufacturing sector over the past few months“, Moutray says.
The Labor Department numbers reinforced fears that the China-led global economic slowdown is hitting America’s recovery, adding to doubt about whether the Federal Reserve will raise rates before 2016.
Investors saw virtually no chance the Fed would end its near-zero interest rate policy at its only other scheduled meeting this year, to be held later in October.
Throughout the summer, many analysts had been expecting a small rate hike in September, but global financial markets began falling in late August amid signs the Chinese economy was slowing.
In Asia, Japan’s Nikkei 225 was flat and Hong Kong’s Hang Seng climbed 3.2% as it reopened from a holiday.