Jobs, Apple lift market mood

A trio of forces helped the major US equity indices end the week on a high note Friday, with market heavyweight Apple reporting expectations-beating results, embattled banking shares rebounding, and a strong jobs report helping alleviate some recession concerns.   The Dow closed 540 points higher on Friday, while the S&P 500 and Nasdaq 100 were up 1.8% and 2.2%, respectively.  On a weekly basis, the Dow and S&P 500 lost 1.5% and 0.9%, while Nasdaq gained 0.1% and hit its 37-week high.  European equity markets also rose on Friday, with the Euro Stoxx 50 adding 1.3% after some strong corporate earnings.  However, for the week, the Euro Stoxx lost approximately 0.3%. 

Summary for 08.05.2023 

• Asian equity markets mostly rose on Monday, tracking a sharp rally on Wall Street, with the focus now turning to upcoming inflation data from the world’s largest economies, due this week.  Meanwhile, the latest BOJ minutes showed that members were concerned over inflation but warned against hasty changes to monetary policy.  The S&P/ASX 200, Kospi, Hang Seng, and Shanghai Composite gained, while the Nikkei 225 fell. 
• European shares are on track for a muted start while US equity futures inched lower early Monday as investors weigh corporate results and the outlook for the global economy.  The UK has a bank holiday honouring the coronation of King Charles III. 
• Oil prices kept to a tight range on Monday but were reeling from three straight weeks of losses as concerns over worsening demand and economic growth weighed.  Prices sank as much as 17% last week but were able to retrace more than half of those losses towards the end of the week as risk sentiment improved.  Investors now look ahead to the US EIA’s short-term outlook report on Tuesday and OPEC’s monthly outlook report on Thursday for clues on how the market may shape up toward the end of the year. 

• Friday’s strong Employment Report offered a little something for both the economic optimists and the pessimists who fear additional interest rate increases.  While April’s payroll growth of 253,000 was well above expectations, the Labour Department also downwardly revised its combined February and March totals by a combined 165,000.  The unemployment rate fell to 3.4%, which is tied for the lowest level since 1969.  Also, average hourly earnings, a key inflation barometer, rose 0.5% for the month, more than the 0.3% economists had expected and the biggest monthly gain in a year.  On an annual basis, wages were up 4.4%, higher than the expectation for a 4.2% gain. 
• This week in the US will be dominated by news related to prices, including the inflation rate, producer prices, and export and import prices.  Additionally, CPI figures are scheduled to be released in China, Mexico, Brazil, India, and Russia.  In the UK, the Q1 GDP growth data will be released, and investors will be closely monitoring the Bank of England’s interest rate decision.  Elsewhere, China is set to publish external trade data, and Australia will report on consumer and business confidence.