After an initial shot in the wake of the feedback arrived from non farm payrolls (beyond expectations with + 261 thousand new employees in October), the major US stock indices are turning red. the S&P 500 fell -0.1 &, while the Nasdaq lost 0.45%. Among the most troubled stocks are big names such as Tesla (-4.8) and Netflix (-4%), while Apple sells about 3 percent.
US non-farm payrolls in October showed a still healthy job market (+261 thousand compared to the +205,000 units of the consensus). The market initially reacted positively especially looking at the higher-than-expected rise in the unemployment rate to 3.7% and wage growth which appears to have stabilized after months of strong growth. This has increased the likelihood of an upcoming less substantial rate hike in December.
The chairman of the Federal Reserve of Richmond, Thomas Barkan, said today that a strong job market and stubborn inflation mean the central bank may need to hike rates beyond 5%, even though it could slow the pace of hikes. Interviewed by CNBC, Barkin said that rate hikes have pushed policy to the point where the Fed has now moved from foot on the accelerator to the brake. “I am ready to do that, and I think the implication of that is probably a slower pace of hikes, a longer pace of hikes and a potentially higher point,” the Fed said.