09.11.2015 - The markets reacted with restraint to the report on the US labor market
US stock indexes finished the last trading day of the week with a slight change. The main event of the day was the publication of a report on the US labor market according to which the unemployment rate fell in the US by 0.1% in October to 5.0%, growth in the number of jobs outside the agricultural sector has grown to 271 thousand vs. expected 181 thousand. At the same time, the average hourly wage increased by 0.4% against the forecast of 0.2%. The improvement in the labor market leads to an increase in the probability of the Fed raising interest rates in December, after a meeting of the Federal Open Market Committee, which will be negatively displayed on stock indexes. Today, in the US will not be published vital statistics, and investors will wait for Janet Yellen speaking on Thursday and publication of a report on retail sales on Friday. To overcome the highs around which the indexes are now will be needed a strong incentive.
European stocks have reacted with restraint to a positive report on the US labor market, and now continue to consolidate near the previous close. It is worth noting that 52% of companies in the index STOXX 600 that have reported for the third quarter has met analysts' expectations or exceeded them. The fall of euro against the dollar strengthening will continue to support economic growth in the region, but after the strong growth of the past few weeks, we may see a correction. Today, investors were disappointed by the weak data on German trade balance surplus which in September totaled 19.4 billion against the expected 20.3 billion. The mood may also be affected by the news from the meeting of Eurozone finance ministers. We keep medium-term positive outlook, but note the increase in the probability of price correction in the near future.
Markets in the Asia-Pacific region showed different dynamics. Thus, the Japanese market was supported by the fall of the yen. Also today, was published a report according to which the average wages in Japan rose in September by 0.6% compared to the same period last year, which was 0.1% better than analysts' forecasts. Investors are waiting for tomorrow's publication of statistics on the consumer price index in China, and the balance of payments in Japan. Our medium-term outlook is positive, and the Japanese market is the most attractive in the region in the near future.