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Pharmaceutical industry

Stocks End Week Higher Despite Blowout Jobs Report Raising Rate Liftoff Chances

Strategic Insights

— 1 min read

Despite a stronger-than-expected jobs report that boosted chances of the Federal Reserve's rate liftoff, the major averages closed the first week of November with gains, continuing the momentum seen throughout October. The jobs report showed nonfarm payrolls growing by 271,000 jobs in October, exceeding expectations of 185,000 job additions, while the unemployment rate fell to 5.0%. This development, combined with other economic indicators, contributed to a more optimistic outlook on the Fed's interest rate decisions.

Key Takeaways:

  • The jobs report showed a significant increase in nonfarm payrolls, with 271,000 new jobs added in October, beating expectations of 185,000.
  • The unemployment rate fell to 5.0% from last month's 5.1%, meeting expectations.
  • The labor participation rate remained unchanged at 62.4%.
  • Markit's manufacturing purchasing managers index (PMI) for October rose to 54.1, surpassing the expected reading of 54.0.
  • ISM's manufacturing index for October came in at 50.1, in line with the consensus forecast of 50.0.
  • The Shanghai composite index gained about 6% for the week, driven by the Chinese government's decision to resume mainland IPOs before year-end.
  • In Europe, Markit's PMI for the euro-area rose to 52.3, ahead of the median expectation of 52.0.
  • Facebook's stock surged nearly 5% on Thursday, with analysts generally bullish on the company's future prospects.
  • Visa shares declined about 3% on Monday after the company announced a definitive agreement to acquire Visa Europe and reported Q4 earnings.

Statistics:

  • 271,000: number of new jobs added in October (TheFlyOnTheWall).
  • 5.0%: unemployment rate as of October (BLS).
  • 62.4%: labor participation rate (BLS).
  • 54.1: Markit's manufacturing PMI for October (Markit).
  • 50.1: ISM's manufacturing index for October (ISM).
  • 6%: gain in Shanghai composite index for the week (Bloomberg).
  • 52.3: Markit's PMI for the euro-area (Markit).
  • 154,947: Dow's intraday trading average (TheFlyOnTheWall).
  • $5.9B: equity value of King Digital (KING) being acquired by Activision Blizzard (ATVI).
  • 18: cash per share paid by Activision Blizzard for King Digital (King Digital).

Sources:

  • TheFlyOnTheWall.com
  • Bloomberg
  • BLS (Bureau of Labor Statistics)
  • Markit
  • ISM (Institute for Supply Management)

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