U.S. equities ended mixed as weaker employment data reduced expectations for an October Fed hike, while elevated Treasury yields, volatile oil prices, and U.S.-Iran tensions weighed on sentiment. The Nasdaq and S&P Mid Cap 400 advanced; the Dow and S&P 500 declined. On the macro data front, September payrolls rose just 29,000, versus 90,000 expected. Prior months were revised down by 60,000, and unemployment increased to 4.2%. Treasury yields fell following the release but remain higher on the week. Other macro indicators were mixed: private hiring improved, vacancies declined, and jobless claims remained low. Inflation stayed sticky, with headline PCE at 3.4% annually and core PCE at 3.0%. Second-quarter GDP growth was revised up to 2.2%, while underlying private demand expanded 4.6%. Manufacturing grew for a ninth consecutive month, with the ISM PMI at 54.5. However, its prices index surged to 77.9, highlighting renewed cost pressures. Slower hiring strengthens the case for a Fed pause, although resilient demand and inflation complicate the policy outlook. The pan-European STOXX Europe 600 Index ended the week down 1.14% in local currency terms. French fiscal concerns weighed on sentiment and pushed OAT-bunds spread higher and the euro lower. Japan’s Nikkei 225 Index advanced 2.93%. Oil prices extended the week's rise, with Brent above $102 by late Friday on the lack of any sign of an off-ramp in Iran. Gold stalled while bitcoin flirted with $87k.
Have a great weekend
Charles & Syz Research Lab