Wall Street rises/ November jobs report/ S&P 500 record/ Federal Reserve rate cuts/ Ulta Beauty earnings/ Lululemon stock surge/ Bitcoin $103K/ NEW YORK/ Newslooks/ J. Mansour/ Morning Edition/ U.S. stocks gained Friday, with the S&P 500 nearing a record high after strong November jobs data bolstered hopes for a Federal Reserve rate cut. The report showed solid hiring but a slight uptick in unemployment, easing inflation fears and encouraging investor optimism.
Wall Street Gains on Solid Jobs Data: Quick Looks
- Market Movement: S&P 500 rises 0.3%, Nasdaq gains 0.3%, Dow up 92 points.
- Jobs Report Impact: 227,000 jobs added in November; unemployment ticks to 4.2%.
- Fed Expectations: High confidence in a December rate cut, future cuts uncertain.
- Retail Gains: Ulta Beauty and Lululemon shares surge on strong earnings.
- Global Markets: Mixed results as Europe rallies and Asia sees political tensions.
Wall Street Near Record as Solid Jobs Report Boosts Optimism
Deep Look
Market Reaction to Jobs Data
Wall Street rallied Friday after the Labor Department reported the U.S. economy added 227,000 jobs in November, exceeding expectations. While unemployment edged up to 4.2%, traders viewed the data as a sign of economic resilience without reigniting inflation fears.
The S&P 500 rose 0.3%, setting up for one of its best years since the early 2000s. The Nasdaq composite gained 0.3%, and the Dow Jones Industrial Average climbed 92 points, or 0.2%.
“This print doesn’t kill the holiday spirit,” said Lindsay Rosner, head of multi-sector investing at Goldman Sachs Asset Management.
Federal Reserve Outlook
The jobs report reinforced expectations that the Federal Reserve will cut interest rates during its December meeting. Traders estimate an 87% probability of a rate reduction, according to CME Group.
“Lower interest rates can help ease economic brakes but also risk reigniting inflation,” Rosner added.
The Fed has already lowered its benchmark rate twice this year after 11 hikes in 2022 and 2023 to combat inflation. Despite progress, stubborn wage and housing data suggest further reductions in inflation could be challenging.
“The Fed still needs to be careful,” cautioned Scott Wren, senior global strategist at Wells Fargo Investment Institute.
Retail Highlights
Encouraging earnings reports from Ulta Beauty and Lululemon boosted market optimism:
- Ulta Beauty: Shares soared 11.8% after the company reported better-than-expected profit and revenue, driven by new store openings.
- Lululemon: The athletic apparel giant saw a 15.8% jump as strong international sales helped beat earnings forecasts.
However, the retail landscape remains mixed. Target’s sluggish sales outlook contrasted sharply with Walmart’s more optimistic projections, reflecting uncertainties about consumer spending amid a slowing job market.
Treasury Yields and Inflation Implications
The 10-year Treasury yield fell to 4.13% from 4.18% Thursday, reflecting cooling concerns about aggressive Fed action. Lower yields suggest easing borrowing costs, which can stimulate economic activity.
Global Market Developments
European and Asian markets presented a mixed picture:
- France’s CAC 40: Jumped 1.4% after President Emmanuel Macron announced plans to name a new prime minister following a no-confidence vote that ousted his government.
- Asia: Hong Kong and Shanghai rallied ahead of China’s annual economic policy meeting, while South Korea’s Kospi fell 0.6% amid political instability. President Yoon Suk Yeol faces potential impeachment after declaring and revoking martial law this week.
Bitcoin Holds Strong
Looking Ahead
As Wall Street heads into the final weeks of 2024, investors remain optimistic about economic growth, particularly if the Fed delivers additional rate cuts next year. Strong consumer spending and resilient job growth could stave off a recession, but the path forward will depend on inflation trends and global stability.
