Bad week for the main European stock markets, with US employment growth picking up in September after the previous month’s decline and the unemployment rate rising, highlighting a series of contrasting trends in a fragile labor market.
The details of Non-Farm Payrolls
Data from the Bureau of Labor Statistics showed nonfarm payrolls rose by 119,000 after a downward revision the previous month, while the unemployment rate hit a four-year high of 4.4% as the labor force grew.
Impacts on the Federal Reserve
October and November data have not been released, the Bureau of Labor Statistics has announced that they will be released together in December. This means that the Federal Reserve, at its meeting on 9-10 December, will have an incomplete picture and will have to decide monetary policy based mainly on the September data. The October FOMC minutes, published this week, revealed “strongly divergent views” on whether to keep rates unchanged this year (following the cut decided there, with which the document reported that “several” officials disagreed): “many participants suggested that, based on their economic outlook, it would be appropriate to keep key rates unchanged for the rest of the year”, while other participants said that another reduction in December “might be appropriate if the economy does not evolve more or less as expected.”
Nvidia gets AI right
Another highlight of the week was the publication of Nvidia’s accounts: its forecasts for the fourth quarter and the decidedly optimistic comments of the CEO, who underlined that “the demand for computing capacity continues to accelerate” and stated that “artificial intelligence is spreading everywhere and can do everything”, provided reassurances on the performance of companies linked to artificial intelligence.
Bitcoin at 7-month lows below $90,000
Doubts about the Fed’s next moves contributed to Bitcoin falling below $90,000 and hitting 7-month lows. From the highs seen in recent months, the main cryptocurrency by capitalization has fallen by around 30% from the peak of 126 thousand dollars reached at the end of October.
Strong dollar pushes gold down
A trend also shared by gold which widened its losses on the Asian markets in the last session, also thanks to the strengthening of the dollar. On the precious metals front, the market is pricing in an increasing likelihood of “higher for longer” rates, making non-yielding assets less attractive compared to Treasuries. In parallel, the dollar’s strength also put pressure on platinum, silver and copper, which reversed last week’s recovery.
The weekly performance of the stock markets
The worst performance of the week was recorded by the Milan and Madrid markets, both down by more than 4%. The Frankfurt stock market fell by 3.9%, while Paris slipped by 3% and London by 2.7%. The outcome is also expected to be a decline for the Wall Street stock market.
The best and worst in Piazza Affari
On Piazza Affari, the worst performance was recorded by Leonardo which dropped 10.3%, followed by STM, Stellantis and Nexi, all down 8%. The best performer, however, is Azimut, up 3.2%. Furthermore, utilities stocks performed well: Terna (+3.1%), Hera (+1.6%), Italgas (+2.3%), Snam (+1.2%), which benefited from their defensive nature in an uncertain market context.
