Published: Tue, January 08, 2019
Medical | By Mark Scott

Strong December hiring unlikely to change Fed's policy stance

Strong December hiring unlikely to change Fed's policy stance

In the cash market, the benchmark S&P 500 Index settled at 2531.94, up 84.05 or +3.17%.

Zeroing in on small-caps, the Russell 2000 index surged 3.8% to 1,380.75.

While Trump has broken with a long-held tradition of a sitting president refraining from publicly commenting on monetary policy, he is not the only one to criticize Powell. Against that backdrop, Powell, during an panel discussion featuring former Fed bosses, Janet Yellen and Ben Bernanke at an event in Atlanta, said the employment report underlined the economy's health.

Powell, in remarks to the American Economic Association, soothed market nerves with assurances that the central bank is sensitive to risks that worry investors and is not on a preset path of interest rate hikes. Netflix was helped further after Goldman Sachs added the streaming service to its conviction list. The Nasdaq did well also moving up even more at 4.3 percent or 275.4. Followed by the dovish Fed talk, the United States dollar had been found foundering below its key support level of 95.60 and a breach below 95.10 is likely, while the USA shares started to jumpstart, posting their biggest intra-day gains in the new year.

When asked where the smart money would go - would it go to China after the warning Apple gave or would it chase developed markets after the jobs report, he said, "The smart money will be rethinking this whole idea that the global economy is slowing down and my guess it want take much to get the risk on trade back in play again".

The Dow Jones Industrial Average climbed 358.59 points, or 1.6%, to 23,044.81 after tumbling 660 points on Thursday. The unemployment rate rose to 3.9%, up from 3.7% the previous month.

Intel Corp (NASAQ:INTC) was the biggest victor on the Dow, climbing 3.9% to $46.24 after Bank of America Corp (NYSE:BAX) upgraded the chipmaker to a Buy.

The S&P 500 posted no new 52-week highs and 1 new low; the Nasdaq Composite recorded 5 new highs and 19 new lows.

USA stocks are seen starting higher at the end of the week after the bloodbath yesterday, which saw the Dow Jones Industrial Average sink 660 points.

Today brings the closely watched jobs data as the US Labor department reveals the non-farm payrolls for December.

Analysts predicted that job reports for January and February will be more of a policy reference for the Fed than the December report as they would provide a clearer picture of how tightened financial conditions affect the US economy.

The US added 155,000 jobs in November, so that would be a robust number and show that hiring was still strong in the world's largest economy. "He said a "supply-side revolution" is allowing the US economy to grow without raising the threat of inflation". "More growth, more people working does not cause inflation", Kudlow said.

Private economists viewed Powell's comments as a strong signal that the Fed, which in December had projected another two rate hikes in 2019, may end up deciding to pause hikes for several months.

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