Stock jumped on Friday after a volatile week of trading.
Crude oil (CL=F) soared 4.25% as of 9:59 am. ET to $53.70 per barrel after OPEC agreed to cut production by 1.2 million barrels per day during the second day of negotiations in Vienna.
Job growth slowed in November.
Nonfarm payrolls rose by 155,000 in the month of November, which was below economists’ expectations of 198,000. Unemployment held steady at 3.7%, as expected. Average hourly earnings in November rose 0.2% over the month of October and 3.1% over last year.
The Bureau of Labor Statistics revised October’s jobs number down to 237,000 from the 250,000 initially reported.
Last night, Federal Reserve Chairman Jerome Powell spoke at the Housing Assistance Council’s 2018 Rural Housing Conference in Washington D.C. and had some optimistic words about the current state of the U.S. economy.
“I am happy to report that our economy is currently performing very well overall, with strong job creation and gradually rising wages. The unemployment rate is 3.7 percent, the lowest since 1969. A strong job market has encouraged more people to participate in the labor market, another positive development. In fact, by many national-level measures, our labor market is very strong,” Powell said.
All of this comes after an extremely volatile week for the market. UBS, in a note on Friday, said, “The fear of additional U.S. trade taxes is really not being well received, and investors seem to see the risk as rising. Otherwise, economic data was generally pretty good.”
Nevertheless, Capital Economics isn’t sounding the alarm just yet. “The slightly more modest 155,000 gain in payroll employment in November may not go down well in markets given the heightened nervousness in recent months, but this is still a solid gain that suggests economic growth is gradually slowing back towards its potential pace. There is nothing here to suggest the economy is suffering a more sudden downturn.”
Mark Hamrick, Bankrate.com’s senior economic analyst, said, “As the Federal Reserve looks at the employment data going into the next meeting, it likely remains on track to raise rates by a quarter of a point. The bigger question remains what it will signal regarding the trajectory of rates, or the number of rate hikes, in the year ahead. Investors clearly want the Fed to cool it with rate hikes amid concerns about trade and tariffs, risks for global growth and the slowdown in the housing market.”
Jim O’Sullivan, chief U.S. economist at High Frequency Economics echoed Hamrick’s prediction of a likely rate hike next month despite the weaker-than-expected jobs number. “The rise in payrolls was a bit below the recent trend, although not dramatically given normal volatility. The data likely remain strong enough for the Fed to raise rates again at this month’s meeting, although the statement and the dot plot will probably have a more dovish tone than last time.”
STOCKS: Altria makes massive cannabis bet, Broadcom and Lululemon soar on earnings beat
Altria (MO) jumped after the company announced a $1.8 billion investment in cannabis company Cronos Group (CRON). The deal is expected to finalize in the first half of 2019 and represents a 45% equity stake in Cronos. Altria will also be nominating 4 members to Cronos’ board of directors. Chronos shares were soaring more than 20% following the announcement.
Broadcom (AVGO) shares soared after the chipmaker reported better-than-expected Q4 earnings after the bell on Thursday. The company earned $5.85 per share versus the $5.56 per share analysts were anticipating. Revenue came in at $5.45 billion which was above consensus of $5.40 billion.
Atheleisure brand Lululemon (LULU) stock was sinking on Friday after the company reported sales that beat consensus estimates. Though the company beat on both the top and bottom lines, fourth quarter outlook was weaker than expected. Lululemon expects to earn $1.64 per share on $1.13 billion of revenue.