The week ends in style on the markets. Wall Street climbs new heights on the back of the better-than-expected labor market report, fueling optimism about the economic recovery. Optimism also dictated by Pfizer’s announcement regarding its easy-to-administer Covid-19 pill that is capable of reducing hospitalizations and deaths by 89%. Also echoed by the words of the Pfizer board member, Scott Gottlieb, that the pandemic could end in the United States when President Biden’s workplace vaccine mandates go into effect in early January.
All three major New York Stock Exchange indices – Dow Jones, Nasdaq, and S&P 500 – updated all-time highs today with increases of the order of half a percent. In addition to Pfizer (+ 8%), there are Amazon and Meta (formerly Facebook) with over + 2%.
Piazza Affari also rose sharply with the Ftse Mib, which gained over 1% in the area of 27,866 points (new tops since 2008).
The feedback from the October payrolls
In October, the United States saw 531,000 new jobs, better than the analyst consensus growth of 425,000-450,000. The September figure was revised upwards from +194,000 to +312,000 units. The payrolls for August have also been revised upwards from the increase of +366,000 initially disclosed to +483,000 units. The unemployment rate drops to 4.6% (4.7% expectations). Average wages rose by 0.4% m / m (consensus + 0.6%). Wages rose 4.9% yoy (consensus + 4.9%).
FED & co. they risk losing credibility
Labor market numbers that could fuel expectations that the Fed, also thanks to inflationary pressures, will proceed with a rate hike already in the first half of 2022.
“The figures suggest that the US economy is showing improvement in the world of work and more and more workers are demanding higher wages. The rise in consumer prices risks being fueled not only by the increase in the prices of raw materials but also by the growth in inflation expectations. With central banks that are not very credible in their commitment to maintain price stability, inflation could increase further ”, he remarks Filippo Diodovich, Senior Market Strategist of IG Italia.
“In order to maintain independence and reputation, Powell will have to be more aggressive in controlling the price trend, preparing the markets for an upcoming rise in the cost of money in 2022”, continues Diodovich, who does not rule out that there may be further surprises in the next Federal Reserve meeting. . “Central bankers cannot lose control over prices and in the event of further inflamed inflation Powell will have to reiterate to the markets the commitment to intervene with an increase in the cost of money in case of need ”.
Among the other important reactions on the markets is that of the dollar which strengthened especially against the euro with eur / usd exchange rate dropped to 1.1515, a new low of the last 15 months.