The US markets opened November on a positive note as investors set aside concerns over a weak October jobs report, pushing major indices higher. The Dow Jones Industrial Average gained nearly 300 points, with Amazon and Intel leading gains in the technology sector. Despite the dismal jobs data showing the lowest monthly gain since December 2020, market participants appeared unfazed, attributing the softness to temporary factors such as hurricanes and strikes. Optimism surrounding tech earnings, alongside expectations of a Federal Reserve rate cut, helped the S&P 500 and Nasdaq Composite also close in the green. Meanwhile, European markets followed suit, lifted by gains in bank stocks, while Asian markets ended the session mixed as attention turned to upcoming US Federal Reserve decisions and the November 5 US presidential election.

Key Takeaways:

  • Dow Closes Nearly 300 Points Higher: The Dow Jones Industrial Average rose by 288.73 points, or 0.69%, closing at 42,052.19. The rally marked a strong start to November, despite the latest jobs report showing the slowest monthly employment growth since December 2020. The unemployment rate held steady at 4.1%, with weak job creation attributed to recent hurricanes and a prolonged labour strike at Boeing. Investors appeared to brush off concerns about the weak jobs data, focusing instead on strong earnings from major companies and expectations of a Federal Reserve rate cut at the November policy meeting.
  • S&P 500 and Nasdaq Also Gain: The S&P 500 gained 0.41%, ending the day at 5,728.80, while the Nasdaq Composite added 0.8%, closing at 18,239.92. This positive momentum followed a turbulent October, where both indices posted declines for the month. Investors were encouraged by broader market optimism and reduced volatility, turning away from recent concerns about the Federal Reserve’s tightening policy and disappointing earnings from some tech giants.
  • Jobs Report Falls Far Short of Expectations: The October jobs report showed the US economy adding only 12,000 jobs, a stark miss compared to Dow Jones’ estimate of 100,000. This marked the lowest monthly gain since December 2020, reflecting the impact of hurricanes in the Southeast and a major labour strike at Boeing. The manufacturing sector saw a decline of 46,000 jobs, largely due to the Boeing strike, which accounted for a loss of 44,000 positions. Despite this, the unemployment rate remained unchanged at 4.1%, while average hourly earnings rose by 0.4% for the month.
  • European Markets Begin November on a Positive Note: European stocks opened the new month with solid gains, as investors processed the weak US jobs data. The pan-European Stoxx 600 rose by 1%, with banking stocks leading the way, up 1.5%. Germany’s DAX gained 183 points, or 0.96%, to end higher, while France’s CAC 40 rose 67 points, or 0.91%. The UK’s FTSE 100, however, was down 71.69 points for the week, ending at 8,177.15, weighed down by broader economic concerns and mixed results from corporate earnings. U.K. house prices increased by 2.4% annually in October, down from September’s 3.2%, reflecting a cooling property market.
  • Asian Markets See Mixed Results as Fed Rate Decision Looms: Asia-Pacific markets closed mixed, with investors remaining cautious ahead of key events like the upcoming US elections and the Federal Reserve’s November policy meeting. Japan’s Nikkei 225 fell by 2.63% to 38,053.67, extending losses after the Bank of Japan maintained its benchmark policy rate at 0.25%. The Topix Index also fell 1.52%, closing at 2,644.26. China’s CSI 300 briefly gained over 1% before reversing course to close slightly lower at 3,890.02, while Hong Kong’s Hang Seng Index rose 0.93% to 20,505.38. South Korea’s Kospi dropped 0.54%, and the Kosdaq fell 1.89% as market sentiment remained fragile. Meanwhile, Australia’s S&P/ASX 200 closed down 0.5% at 8,118.8, as weaker-than-expected producer price data and risk-averse sentiment weighed on the market.
  • Oil Prices Edge Higher Amid Geopolitical Tensions: Oil prices rose slightly on Friday amid reports that Iran was preparing a retaliatory strike against Israel from Iraq. Brent crude gained 29 cents, or 0.4%, to close at $73.10 per barrel, while West Texas Intermediate added 23 cents, or 0.33%, settling at $69.49. Despite the minor uptick, both benchmarks were down more than 3% for the week, reversing gains of 4% from the previous week. Market participants remained on edge due to the evolving conflict in the Middle East, which continues to impact supply dynamics and influence investor sentiment.
  • Treasury Yields Climb as Traders Discount Jobs Data: The yield on the 10-year US Treasury climbed nearly 10 basis points to 4.382%, as investors shrugged off the weak October jobs report. The 2-year Treasury yield also moved higher by 5 basis points to 4.216%. The recent increase in Treasury yields also reflects the market’s anticipation of policy signals that could hint at future economic direction.

FX Today:

  • EUR/USD Slips Amidst Broader Market Gains: EUR/USD ended the session lower, trading around 1.0832 as market sentiment improved despite the weaker-than-expected US jobs data. The pair failed to hold above key resistance at the 50-period SMA of 1.0821, with the 100-period SMA at 1.0855 providing a significant cap on gains. Continued selling pressure could see EUR/USD test the psychological support at 1.0800, with a further decline potentially taking it to 1.0750. Immediate resistance is set at 1.0855, with stronger resistance at 1.0969.
  • GBP/USD Struggles to Maintain Momentum: GBP/USD traded at 1.2919, failing to recover after a week of downward pressure. The pair remained below key moving averages, with the 50-period SMA at 1.2961 and the 100-period SMA at 1.2998 acting as solid resistance barriers. Selling pressure is likely to see GBP/USD test immediate support at 1.2900, with a break lower potentially extending losses to 1.2850. For any significant recovery, the pair needs to reclaim the 50-period SMA at 1.2961, with further resistance seen at 1.2998.
  • USD/CHF Strengthens as Swiss Inflation Declines: USD/CHF closed higher around 0.8693, as the Swiss Franc weakened on the back of lower-than-expected inflation data. Year-on-year Swiss CPI for October came in at 0.6%, below the forecast of 0.8%, indicating potential further interest rate cuts from the Swiss National Bank. The pair tested resistance at 0.8700, with support levels set at the 50-period SMA of 0.8663 and the 100-period SMA at 0.8645. A break above 0.8700 could lead USD/CHF to target the next resistance at 0.8750.
  • AUD/USD Remains Under Pressure Below Key Averages: AUD/USD continued its bearish trajectory, closing around 0.6554. The pair traded consistently below critical moving averages, with the 50-period SMA at 0.6645 acting as a key resistance level. The 100-period SMA at 0.6684 and the 200-period SMA near 0.6758 further cemented the bearish trend. Immediate support lies at the psychological level of 0.6500, and if breached, could open the path to deeper declines towards 0.6450. Resistance remains at 0.6645 and 0.6684.
  • Gold Retreats, Testing Key Support Levels: Gold prices declined slightly, closing at $2,735.80 as it continued to pull back from recent highs. The metal faced resistance at the 50-period SMA of $2,749, with support provided by the 100-period SMA at $2,714 and the 200-period SMA near $2,673. If gold fails to hold above the 100-period SMA, a further decline towards the 200-period SMA at $2,673 is likely. Conversely, a rebound above $2,749 could renew upward momentum, with the next target at $2,800.

Market Movers:

  • Cardinal Health Rises on Strong Earnings Beat: Shares of Cardinal Health surged 7.7%, reaching a new 52-week high, after the company reported fiscal first-quarter earnings of $1.88 per share, beating analyst expectations of $1.62. Revenue also exceeded estimates, coming in at $52.28 billion compared to the forecast of $50.90 billion. 
  • Boeing Gains on Labour Agreement: Boeing shares rose 3.4% after the plane maker agreed to a new labour contract with its machinists’ union, ending a seven-week-long strike. The labour dispute had led to a loss of 44,000 manufacturing jobs in October, impacting overall job creation.
  • Intel Pops on Better-Than-Expected Results: Intel’s stock jumped 8.4% after the company posted third-quarter earnings that beat expectations, reporting adjusted earnings of 17 cents per share on revenue of $13.28 billion. The upbeat results boosted investor confidence in the chipmaker’s ability to navigate ongoing challenges in the semiconductor industry.
  • Amazon Surges on Strong Cloud Performance: Amazon shares rallied 6.4% after the e-commerce giant’s third-quarter earnings surpassed Wall Street’s expectations. The company’s Amazon Web Services segment grew 19% year-over-year, driving much of the positive momentum. 
  • Atlassian Climbs on Earnings Beat and Guidance Raise: Atlassian shares surged 18.9% following the release of better-than-expected first-quarter earnings. The software company reported earnings of 77 cents per share, beating analyst estimates of 64 cents, with revenue totalling $1.19 billion. 
  • Trump Media & Technology Group Falls Further: Trump Media & Technology Group continued its slide, with shares dropping 8.7% after a 22% decline on Wednesday. The stock faced heavy selling pressure ahead of the upcoming US presidential election, with investors wary of the volatile nature of the company’s shares amid the political climate.

As markets start November, major indices managed to gain despite a weak jobs report and mixed global signals. The Dow climbed nearly 300 points, with tech leaders Amazon and Intel providing much of the uplift, while the S&P 500 and Nasdaq also closed higher. European markets followed suit, lifted by banking stocks, while Asia-Pacific markets saw varied performances as investors eyed upcoming key events, including the US presidential election and Federal Reserve policy decisions. Oil prices edged higher amidst escalating geopolitical tensions, and Treasury yields rose, reflecting investor anticipation of a rate cut. Although gold retreated from recent highs, major market movers, including Cardinal Health and Atlassian, provided optimism through strong earnings. With mixed data on employment and ongoing geopolitical uncertainties, all eyes are now on the Federal Reserve’s next steps and how global markets will respond in the coming weeks.