Asian stock markets are down, discounting the publication of the US employment report in January, which fueled strong doubts on the possibility that Jerome Powell’s Federal Reserve is close to the end of its path of rate hikes.
Indeed, the no-farm payrolls report found that the US economy created 517,000 new jobs last month, well above the consensus-expected growth of 185,000 new payrolls, and at a much stronger pace than even 223,000 new jobs created in December.
Not only. The unemployment rate fell from 3.5% in December to 3.4%, compared with a rise to 3.6% expected.
Keep an eye on the wages component, carefully monitored as it is a crucial parameter that measures the inflation trend.
Average hourly wages rose 0.3% month-on-month in January, as expected.
On an annual basis, however, growth was 4.4%, versus the +4.3% expected. However, there was a slowdown compared to +4.6% in December.
Last week, on Wednesday February 1, the Fomc, the monetary policy arm of the Fed led by Jerome Powell, announced that it had raised US interest rates by 25 basis points, to the new range between 4.5% and 4.75%, a record since October 2007. Powell’s words have been interpreted by many in a dovish key. However, the US employment report dashed hopes of a less aggressive Fed on rates. The selling thus fell on Wall Street: the S&P 500 fell by 1.04% to 4,136.48; the Nasdaq Composite slipped 1.59% to 12,006.95 points, while the Dow Jones Industrial Average fell 127.93 points (-0.38%) to 33,926.01.
At 5.20pm, futures on the Dow Jones, S&P 500 and Nasdaq are down 0.25%, 0.35%, 0.38% respectively. The Nikkei 225 index of the Tokyo stock exchange confirmed its positive exception, closing up by 0.57%. However, the stock exchanges of Hong Kong (-2.16%), Shanghai -0.77%, Seoul -1.14%, Sydney -0.25% lost.