Federal Reserve Chairman Jerome Powell speaks during a news conference at the bank's William McChesney Martin Building on March 20, 2024 in Washington, DC.
Chip Somodevilla | Getty Images News | Getty Images
This report is from today's CNBC Daily Open, the international markets newsletter. CNBC Daily Open keeps investors informed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
CNBC Daily Open will be on hiatus for two weeks following today's newscast. We will be back on Monday April 22nd. See you then!
What you need to know today
Stocks managed to rise
US stocks closed a losing week after… Dow Jones Industrial Average He suffered his worst session in more than a year on Thursday. But traders were able to ignore the sharp jump in yields on Friday after a stronger-than-expected jobs report. the Standard & Poor's 500 It gained 1.1% during the session, while the Dow Jones Index rose 307 points, or 0.8%. Heavy technology Nasdaq Composite It increased by 1.24%. Meanwhile, oil prices rose to their highest levels in five months and posted weekly gains. American crude It rose 4.5% over the week Brent He added 4.2%.
High yield
The big market move was in bond markets where yields suddenly rose after the closely watched non-farm payrolls data for March. The 10-year Treasury yield jumped 9 basis points to 4.4%, and briefly touched a new 2024 high of 4.429%. The two-year Treasury yield also rose by 10.9 basis points to 4.75%. Yields and prices move in opposite directions.
Hot Jobs Report
US nonfarm payrolls numbers showed that job creation in March easily exceeded market expectations. It rose by 303,000 during the month, well above the Dow Jones estimate of 200,000. The unemployment rate fell to 3.8%, as expected. Crunching the numbers, many market watchers suggested the blockbuster report would be another reason for the Fed to take its time, after a wave of policymakers this week began talking more conservatively about interest rate cuts.
An earthquake strikes the northeastern United States
While all this was happening in the markets, a 4.8 magnitude earthquake shook the northeastern United States on Friday morning. It was reportedly felt by people from Boston to Baltimore. In New York City, there were no immediate reports of injuries or damage, but it caused numerous delays and temporary closures of transportation infrastructure.
[PRO] From Nvidia to Boeing
Revealing a selection of her favorite stocks, fund manager Barbara Doran said investors were reluctant to embrace this current bull market “after a few years of deep uncertainty”. Its top picks include high-performance Nvidia, the beleaguered aviation giant Boeing And more.
Bottom line
It took a while, but after some serious thought in the wake of Friday's jobs report, the markets decided they liked it and gained some strength as the day progressed.
Signs that the US economy is in good shape (and the support that corporate earnings can provide) have managed to overcome fears that the Federal Reserve may postpone interest rate cuts amid inflationary pressures. This all comes after some hawkish comments from policymakers that unnerved markets on Thursday.
To be sure, the federal funds futures market is still calculating that the US central bank will start cutting in June, but the chance is now barely more than 50%.
There are still two more payroll jobs reports before the big June meeting. In the words of David Page, head of macro at AXA Investment Managers, this is “not the be-all and end-all of the Fed’s expected easing cycle.” It also indicates that there will be three more inflation readings before then, including one next Wednesday.
But after a tough week, there is now a real risk that the Fed may act later in June and markets will remain on edge for a few months longer.
Correction: The headline and story have been updated to correctly reflect that the Fed may cut interest rates later than initially expected.
