Friday’s rally and U.S. jobs report | Calamatta Cuschieri

Friday ends with a rally

Markets in Europe finished the trading session on Friday with a bang as investors' optimism regarding trade pushed the auto stocks higher. On the data front, market watchers digested figures on the slowing down of the German service sector, deceleration of Eurozone growth in December, as well as the inflation rate. Previously, media reported that numerous German politicians from almost all parties were affected by a data breach after which hackers released their personal information, including ID data, addresses, phone numbers and credit card information, as well as correspondence.

The FTSE 100 ended the session 2.18% higher, as the financial and engineering sectors outperformed. The CAC 40 closed 2.62% in the green. Banking sector and the auto industry led the gains, followed by Airbus stocks, which jumped 4.81%. The German DAX was up 3.25% at the closing bell. Bayer was the biggest winner, soaring 6.74%.

Meanwhile, in the U.S, Federal Reserve Chairman Jerome Powell said the central bank would be "patient" with rate hikes. This was positive news for the market which helped the boost. The Dow Jones Industrial average at one point soared 600 points.

Jobs in the U.S

Whilst the Department of Labour in Washington measured a rise in unemployment for last month of 0.2 percentage points to 3.9%, the report released on Friday revealed a jump in nonfarm employment of 312,000, the most since February, on top of upward revisions for the previous two months – it means the jobless rate grew from people entering the labour market or returning to it.

The labour force participation rate did indeed increase, to 63.1% from 62.9%. Average weekly hours worked ticked up by 0.1 to 34.5. Average hourly earnings growth also surprised to the upside. It added 0.1 points to land at 3.2% on an annual scale, the same as for October, when it was the highest in nine and a half years. The month-on-month rate doubled to 0.4% and the sum reached $27.48.

In November and October combined, the United States added a whopping 58,000 jobs more than initially registered. The main measure of underemployment, known as U-6, held at 7.6%. The level compares to 7.4% from August, the lowest point since April 2001. The headline bottomed in September at 3.7%, the weakest reading since December 1969.

What’s coming next?

Normality returns to financial markets this week, with plenty of corporate and economic data. US and Chinese consumer price indices (CPI), plus an Institute of Supply Management (ISM) non-manufacturing report from the US, are key data to watch for, while UK retailers and a host of other firms update the market on recent trading.

Aside from this, the week should also see the start of fresh debates on the UK’s withdrawal agreement with the EU. A vote is expected during the middle of the month, but at present the deal still looks unlikely to pass through parliament.

Disclaimer: This article was issued by Rodrick Duca, trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.