Stock market: the effect of employment erased by bond rates

(Photo: 123RF)

MARKET REVIEW. The New York Stock Exchange plunged again Friday, after the announcement of much better than expected US employment figures.

The Toronto Stock Exchange was weighed down by the cannabis sector, as the price of oil surpassed the US $ 65 per barrel mark.

The clues

In Toronto, the S&P/TSX was down 56 points, or 0.31%, to 18,069 points.

In New York, the S&P 500 lost 24 points, or 0.64%, to 3,747 points.

The Dow Jones was down 70 points, or 0.23%, to 30,853 points.

The Nasdaq dropped 212 points, or 1.67%, to 12,511 points.

The context

Bond rates, whose recent rise is making the stock market nervous, also accelerated.

The yield on US 10-year debt was moving above 1.58% after hitting its highest level of the year at 1.62% just before the opening, as the US economy appears to be rebounding strongly with 379,000 new jobs created in February, three times more than in January.

Thursday, the three main indices of Wall Street had fallen sharply after statements by the boss of the US Central Bank.

Jerome Powell had indeed disappointed the markets by brushing aside fears of an overheating economy as many investors are worried that a resurgence of inflation will accompany the strong growth to come.

The Nasdaq, which concentrates technology stocks, had dropped 2.11% for its third session of losses in a row. The Dow Jones had lost 1.11% and the S&P 500 had given up 1.34%.

“Stocks are up early in the session after stronger than expected job growth in February, suggesting that the struggling labor market is starting to recover,” Schwab analysts noted.

Thanks to the relaxation of activity restrictions and vaccination campaigns, job creations far exceeded the 200,000 new positions expected by analysts.

These jobs were created mainly in bars and restaurants, but also in other activities related to recreation and accommodation, as well as in health services, retail, and manufacturing.

The unemployment rate, on the other hand, fell only very slightly to 6.2% after 6.3% in January. He was expected stable.

The Commerce Department also announced a widening of the United States’ trade deficit in January as a result of higher imports reflecting a recovery in the American economy. It reached $ 68.2 billion (+ 1.9%) with imports up 1.2%.

Several large technology stocks, sensitive to the rise in bond rates, remained in the red as Twitter (-2,11%), Tesla (-3.49%) or Apple (-0,45%).

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