The United States Department of Labor reported weaker-than-expected employment data for the month of September as employers in the country added 148,000 non-farm jobs. The figure is lower than the 189,000 new jobs projected by economists. The current unemployment rate is 7.2 percent.
Despite the slow jobs growth, the stock markets in the United States traded higher as investors become more optimistic over speculations that the Federal Reserve will not taper its $85 billion bond-buying program.
Last month, the Federal Reserve Open Market Committee ( FOMC) said it will continue to evaluate economic data before making a decision on whether it is appropriate to reduce the quantitative easing.
Joseph Trevisani, chief market strategist at WorldWideMarkets commented, “Today’s underperforming jobs number fully justifies September’s cautious FOMC. Dollar bulls will be discomfited but equities will find the economic logic invigorating.”
On the other hand, BNP Paribas interest strategist, Aaron Kohli, projected that the Federal Reserve’s planned tapering will likely be pushed back on January or February next year, or even later in the case of another potential shutdown. Craig Dismuke, chief economic strategist at Vining Sparks, expressed a similar conviction that the latest jobs data will definitely will definitely pause the Federal Reserve’s planned tapering. He said, “It keeps QE alive and bonds will like it and so might stocks. This is positive for all asset prices.”
Meanwhile, Chris Gaffney, senior market strategist at Everbank Wealth Management told Bloomberg, “These numbers show we are going to continue to see stimulus from the Fed, there is nothing here to indicate the Fed will taper earlier than first quarter of 2014 now.” He added that the jobs data indicates that the stimulus will continues, which will help boost the equity markets.
U.S. Markets
- Dow Jones Industrial Average (DJIA)- 15, 467$.66 (+0.48%)
- S&P 500- 1,754.67 (+0.57%)
- NASDAQ- 3,929.57 (+0.24%)
- Russell 2000- 1,115.33 (+0.26%)
European Markets
- EURO STOXX 50 Price EUR- 3,045.77 (+0.57%)
- FTSE 100 Index- 6,695.66 (+0.62%)
- Deutsche Borse AG German Stock Index DAX- 8,947.46 (+0.90%)
Asia Pacific Markets
- Nikkei 225- 14,713.25 (+0.13%)
- Hong Kong Hang Seng Index- 23,315.99 (-0.52%)
- Shanghai Shenzhen CSI 300 Index- 2, 445.89 (-1.03%)
Stocks in Focus
The stock price of FedEx Corporation (NYSE:FDX) reached as high as $132.28 per share on after JP Morgan analyst Thomas Wadewitz raised his rating for the stock from neutral to overweight. The upgrade was driven by a stronger confidence in the management of the company for its aggressiveness in executing its improvement plans after announcing a huge shares buyback last week. FedEx ended the trading session with a 1.78% gain at $129.68 per share on Tuesday.
The Walt Disney Company (NYSE:DIS) climbed 2.07% to $69.01 a share and reached an all-time high as the company benefits from rising fees for pay television services. Based on data compiled by Bloomberg, analysts are projecting that the stock will increase to $72.42 a share within 12 months. Analysts estimated that the company’s earnings will increase by 9% to $0.75 per share. It is scheduled to report its quarterly financial performance on November 7.
The stock value of Whirlpool Corporation (NYSE:WHR) gained 11.67% to $146.26 per share after the company raised its earnings guidance this year. The company is now expecting to generate $10.10 earnings per share, up from its previous $10 a share estimate. Analysts projected that Whirlpool will deliver $9.97 earnings per share.
Meanwhile, Transocean LTD (NYSE:RIG) jumped 5.86% to $49.30 a share after the company replaced Dell in the S&P 500 index.
