Better than expected job report fail to change momentum
U.S. stocks closed sharply lower on Friday, 07 December 2018 as a lack of concrete progress toward reducing U.S-China trade tensions bolstered risk-off sentiment and overshadowed the November employment report.
The Dow Jones Industrial Average fell 558.72 points, or 2.2%, to close at 24,388.95, the S&P 500 index retreated 62.87 points, or 2.3%, to 2,633.08, while the Nasdaq Composite Index slumped 219.01 points, or 3%, to finish at 6,969.25.
Ten of 11 sectors in the S&P 500 lost ground on Friday, with only utilities advancing, while all 30 components of the Dow traded lower.
For the week, the Dow fell 4.5%, the S&P 500 retreated 4.6%, and Nasdaq tumbled 4.9%. It was the biggest weekly percentage decline for all three benchmarks since March, while also marking the worst start to a December since 2008,
This is despite a relatively strong jobs report which showed that the U.S. economy adding 155,000 new jobs in November 2018 somewhat below expectations of 190,000 new jobs. The jobs report also showed the unemployment rate holding steady at 3.7%, as expected. Average hourly earnings grew 6 cents per hour from October, or 0.2%, just shy of expectations, and grew by 3.1% year-over-year, their highest rate since 2009. The jobs numbers are of particular importance to investors, as these data will inform The Federal Reserve's interest-rate-setting committee, as it prepares to decide whether to raise interest rates at its coming meeting Dec. 18-19.
The jobs numbers are of particular importance to investors, as these data will inform The Federal Reserve's interest-rate-setting committee, as it prepares to decide whether to raise interest rates at its coming meeting Dec. 18-19.
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Bullion prices ended higher at Comex on Friday, 7 December 2018. Gold futures settled Friday at their highest since July, logging their biggest weekly gain since August following market turmoil that sent stocks reeling and pressured Treasury yields and the U.S. dollar.
Gold for February delivery on Comex rose $9, or 0.7%, to settle at $1,252.60 an ounce. For the week, gold was up 2.2%, which was the biggest such gain since a 2.5% rise in the week ended Aug. 24. Gold also settled at its highest since July 10, trimming its year-to-date loss to less than 5%. A weaker dollar can boost commodities priced in the greenback as it makes it cheaper to users of other currencies. Lower bond yields can also be a positive for commodities, which don't offer a yield. March silver gained 1.3% to $14.696 an ounce. It was up roughly 3.4% for the week, but has still lost more than 14% year to date.
Oil futures climbed on Friday, 7 December 2018 as members of the Organization of the Petroleum Exporting Countries and their allies reached an agreement to curb production starting in January, easing worries about a potential global glut of crude supplies and helping to lift prices up by more than 3% for the week.
OPEC announced Friday that it will reduce overall production among its members by 800,000 barrels a day from October's levels for six months, beginning in January. The statement, which may have been written on Thursday, the day of the OPEC meeting, didn't specify the output cut by nonmembers, which include Russia, but news reports have pegged the nonmember cuts at 400,000 barrels a day to bring the total reduction to 1.2 million barrels a day.
Looking ahead, investors will receive the JOLTS - Job Openings and Labor Turnover Survey on Monday.
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