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Stock market: Dax and Dow with price slide after job report, more jobs in the USA

2022-10-07T13:33:27.528Z


In the US, companies have created more jobs than expected, and the labor market is proving robust. This means that the US Federal Reserve has scope for further strong interest rate hikes in the fight against inflation. Dax, Dow and Nasdaq dive.


Enlarge image

Nervousness on the stock exchange: Thanks to the strong start to the week, the Dax is still up for the week, despite the losses on Friday

Photo: DANIEL ROLAND / AFP

Down again: According to the US job market report, the Dax increased its losses on Friday.

The leading German index was recently 1.1 percent weaker and fell back below the 12,400 point mark.

Thanks to the strong start of the week and month, the Dax is still in positive territory on a weekly basis.

In Europe and the US, however, selling pressure increased on Friday afternoon, as investors expect the Fed to raise interest rates further after the robust economic data from the US.

This weighs on stock prices worldwide.

There were only a few winners in the Dax.

The shares of the sports car manufacturer Porsche continued their climb against the trend on Friday and were temporarily quoted at 93 euros.

Since the IPO, Porsche has become the most valuable German carmaker and is now valued higher than the parent company Volkswagen.

Strong job data means more big rate hikes in fight against inflation

Unemployment in the USA fell again in September.

The unemployment rate fell from 3.7 to 3.5 percent, the US Department of Labor announced in Washington on Friday.

This puts the rate back at the July level.

According to the department, 5.8 million Americans are currently unemployed.

The US economy also created more jobs than expected in September.

Outside of agriculture, 263,000 jobs were added, the Ministry of Labor said.

In addition, the increase in employment in the two previous months was revised upwards by a total of 11,000 jobs.

This means that the US Federal Reserve has more leeway for further rate hikes.

Instead, investors had hoped for a pause in rate hikes.

Dow Jones and Nasdaq again with losses

The unexpectedly robust jobs report has motivated US investors to sell: Dow Jones Industrial and the tech-heavy Nasdaq 100 each opened with losses on Friday.

"With the strong job data, there is no reason to doubt that the Fed will soon be tightening interest rates again and will continue to do so in the further course of 2022 and at the beginning of 2023," commented the analysts at Helaba.

The US labor market is regarded as an important indicator on which the US Federal Reserve bases its monetary policy.

The Fed had previously used the robust job situation in the United States as an argument to get the rapid inflation under control with historically large interest rate hikes.

Several central bankers from the ranks of the Fed had already made it clear this week that the tough course would be maintained.

AMD and Nvidia under pressure

On the company side, the shares of the chip group AMD <US0079031078> were deep red before the market.

According to preliminary figures, the Intel <US4581401001> rival clearly missed market expectations in the third, because like many AMD is also struggling with the slowdown in the economy.

Demand was significantly lower, especially in the PC market.

The prices of the competitors Intel and Nvidia <US67066G1040> were also significantly burdened by this news before the official start of trading.

The US investment banks JPMorgan and Goldman Sachs have already reduced their price targets for AMD, among other things they are concerned about the forced reduction in inventories among customers.

Now only cannabis helps

Meanwhile, it's also worth taking a look at cannabis stocks after US President Joe Biden's recent push.

He made a move to fulfill his campaign promise to decriminalize marijuana possession in the United States.

Biden instructed the Departments of Justice and Health by presidential decree to expedite review of the classification of cannabis.

Sector stocks such as Tilray and Aurora Cannabis have recently risen massively.

losses in Asia

Asian stocks fell on Friday, extending a global stock slide to a third day as investors fretted over recession risks amid signs of further aggressive central bank policy tightening and fresh signs of a deep semiconductor plunge.

Dollar and Treasury yields remained elevated after several Federal Reserve officials alluded to further rate hikes ahead of a crucial US jobs report later in the day, while rising crude oil prices fueled concerns about persistent inflation.

Japan's Nikkei index fell 0.72 percent from a two-week high hit on Thursday, with losses for technology stocks noting after US chipmaker Advanced Micro Devices cut its quarterly sales forecast by about $1 billion had lowered.

Bitcoin hits the $20,000 mark

The world's best-known digital currency Bitcoin was last listed on the Bitstamp trading platform at 19,847

U.S. dollar.

"The Bitcoin price has already shown itself to be unusually robust over the past three months. This applies to almost all digital assets compared to traditional benchmarks," comments Benjamin Dean, responsible for digital assets at WisdomTree.

Oil prices fall

Oil prices gave up a small portion of their hefty premiums from the week on Friday morning.

In early trading, a barrel (159 liters) of North Sea Brent cost $94.17.

That was 25 cents less than the day before.

The price of a barrel of West Texas Intermediate (WTI) oil fell 23 cents to $88.22.

Crude oil

prices

have risen sharply over the past week .

The decisive factor was a significant cut in production by the Opec+ oil network.

The 20 or so oil states were reacting to the sometimes significant price declines in the weeks before.

These were triggered by increasing fears of a recession and a correspondingly weak expected demand for oil.

Since then, analysts have been wondering whether the producing countries have actually initiated a trend reversal on the oil market with their cuts.

The lower supply, which is encountering a market that is already tense due to the Ukraine war, speaks for sustained higher prices.

However, production is likely to decline more moderately than the producing countries agreed on paper.

Because even before the cut, some OPEC countries had problems delivering the agreed production.

With news agencies

Source: spiegel

All news articles on 2022-10-07

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