A blockbuster data set off the market.
On the evening of May 3, Beijing time, the U.S. Department of Labor released a non-farm payrolls report for April, which showed that non-farm payrolls in the United States increased by 17 percent in April.Powerballpowerplay.50, 000, much lower than expectedPowerballpowerplayThe US unemployment rate was 3.9 per cent in April, higher than the expected 3.8 per cent.
Wall Street institutions say the labor market has cooled significantly and will change the Fed's next move. After the disclosure of the data, traders advanced their expectations of the Fed's first rate cut to September from November this year; US interest rate futures expect the Fed to cut interest rates twice by 25 basis points in 2024, compared with one before the release of non-farm data.
Stimulated by this, the markets in the United States and Europe soared across the board. Among them, the three major US stock indexes collectively opened higher. As of 22:00 Beijing time, the Dow was up 1.29%, the Nasdaq was up more than 2%, and the S & P 500 was up 1.24%. The European market was also collectively strong, with the European Stoxx 600 index rising 0.9% at one point, and the French CAC40 index the biggest intraday gain of more than 1%.
Looking back on the May Day holiday, although the A-share market was closed, China's assets were positive frequently, and Hong Kong stocks and US-listed stocks soared collectively. The uncertainty of the A-share market is declining and there is no downside risk is becoming a consistent expectation, so A-share investors are full of expectations for the post-holiday market performance.
Heavy weight is good.
On the evening of May 3, Beijing time, the US Department of Labor released its April non-farm payrolls report, which showed that US non-farm payrolls increased by 175000 in April, lower than the expected figure of 240000 and much lower than the previous figure of 303000.
The report shows that the unemployment rate in the United States was 3.9% in April, higher than the expected 3.8%, and the previous value of 3.8%, the highest level since January 2022. Us Treasury Secretary Yellen Yellen's more valued and more comprehensive U6 unemployment rate is 7.4%, the highest level since November 2021.
In addition, the year-on-year increase in wages was lower than expected and previous values. According to the report, the average hourly wage growth rate in the United States slowed to 3.9% year-on-year in April, compared with an expected 4%, compared with a previous value of 4.1%. The average hourly wage growth rate in the United States slowed to 0.2% month-on-month in April, compared with an expected 0.3%.
Private sector employment in the United States fell by 167000 in April, below expectations of 195000 and also below the previous figure of 232000, while manufacturing employment in the United States changed by 8000 in April, higher than the expected figure of 5000.
The data showed that US employers scaled back hiring in April, with unemployment rising unexpectedly and wage growth falling, suggesting that the US labour market is cooling after strong growth at the start of the year.
Chris Anstey, an analyst, said wage growth in the non-farm report was also lower than expected, with revisions to the previous two months leading to a cumulative loss of 22000 payrolls, so it was an across-the-board weak employment report.
Wall Street institutions say the whole market is paying close attention to the latest non-farm reports because the labor market determines the trajectory of inflation. A marked cooling in the labour market will change the Fed's next move. This means that the window for interest rate cuts later this year will be advanced.
After the release of the data, traders advanced the timing of the Fed's first rate cut from November to September. Us interest rate futures are expected to be cut by 25 basis points twice by the Federal Reserve in 2024, compared with one before the release of non-farm data.
Richard Flynn, general manager of Schwab Financial, said the latest non-farm payrolls report showed that demand in the labour market was slowing. The collapse of the labour market could prompt the Fed to shift from a "stroll" to a "sprint".
Institutional analyst Anna Wong and others said that the weaker-than-expected non-farm payrolls data in April, coupled with a rise in the unemployment rate, could strengthen the "dovish" stance of Federal Reserve Chairman Colin Powell, whose April jobs report increased the likelihood that the Fed would cut interest rates in July.
In addition, some analysts warn that the level of unemployment in April has heralded a future recession in the United States. Commodities analyst Andrea Lisi said the current economic cycle is showing signs similar to many other cycles and that a hard landing rather than a soft landing may be imminent. At present, the labor market, the backbone of the US economy, is in danger.
The whole world is going crazy.
Tonight's non-farm report directly exploded the global market, with the three major indexes of US stocks collectively higher. As of 22:00 Beijing time on May 3, the Dow was up 1.29%, the Nasdaq was up more than 2%, and the S & P 500 was up 1.24%.
Among them, Apple rose more than 8% at the beginning of the session. According to news, the company's second-quarter revenue and net profit exceeded market expectations, and announced the largest-ever $110 billion share buyback; the semiconductor sector strengthened, with Nvidia and TSMC up more than 3%, Micron Technology and AMD up more than 2%; and shares of technology giants such as Microsoft, Meta, Tesla and Amazon also rose across the board.
European markets also strengthened collectively. After the release of US non-farm data in April, the European Stoxx 600 index rose to 0.9 per cent, France's CAC40 index rose more than 1 per cent, and Germany's DAX index expanded to 0.86 per cent.
After the release of US non-farm data in April, the dollar index plunged, breaking its lowest level since April 10 to 104.52, with the largest intraday decline of 0.76 per cent.
While the dollar weakened, non-US currencies strengthened across the board, with the yen rising as much as 1 per cent against the US dollar, hitting the 152.00 mark; the euro rose sharply against the US dollar, refreshing its highest level since April 10 and now trading at 1.0777; the Australian dollar rose more than 1 per cent against the US dollar at one point to 0.6631, and the Norwegian krona rose more than 2 per cent to 0.0921.
LPL Financial's Quincy Krosby said that from the market reaction, the latest employment report is a welcome data. More importantly, the unemployment rate has risen slightly, indicating a cooling of the labour market. The reason this is important for the stock market is that the stock market is looking for any sign that inflation may start to fall as the labour market cools. Therefore, this is very good for the market.
How big is the impact?
Looking back on the entire May Day holiday, although the A-share market was closed, Chinese assets were positive frequently, and Hong Kong stocks and US-listed stocks soared collectively.
From a macro point of view, the whole is more optimistic. Among them, the tone of the Fed's interest rate meeting this week was unexpectedly skewed, leading to a significant pick-up in risk appetite in global markets.
Federal Reserve Chairman Colin Powell made it very clear that the Fed's next move is unlikely to be to raise interest rates.
华尔街分析人士指出，美联储似乎已经排除了加息的可能性，但其明确表示，愿意在更长时间内维持较高利率。因此，一份显著降温的就业报告无疑是重大利好。
当前，A股市场的不确定性下降，没有重大下行风险正在成为一致预期。因此，A股投资者对节后市场充满期待。
招商证券认为，后续预计更多外资将回流中国，带动A股重回上行趋势。同时，随着新“国九条”落地，一季报上市公司业绩改善，A股绩优龙头公司给投资者带来的真实回报预计也将提升。
国泰君安证券也表示，最差的情形在年初已经见过，在房地产放松加速、制造转型与价格通胀回升等诸多不确定性下降的情况下，将推动A股年中行情出现。
方正证券认为，历史上，A股的风险偏好一般都将在5月迎来回升。随着年报及一季报的披露结束，业绩风险对于A股的压制效果也将逐渐减弱，一季度经济基本盘的稳定为A股的中长期上涨趋势奠定了基础。