Wednesday, June 19, 2024

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    Wall Street Bulls Charge Ahead on Dovish Jobs Data

    Wall Street Surges on Soft Jobs Data – Fed Rate Cut Speculation Grows

    Wall Street’s main indexes surged on Friday following a weaker-than-anticipated jobs report, sparking optimism about potential interest rate cuts by the Federal Reserve this year. Apple and Amgen contributed to the gains, propelling the market forward.

    US job growth in April slowed more than projected, with the annual wage increase dipping below 4% for the first time in nearly three years. Additionally, the unemployment rate exceeded estimates, prompting traders to speculate that the Fed might implement its first rate cut of the year in September.

    David Russell, TradeStation’s global head of market strategy, remarked, “Worries about wage pressures have dragged on the market recently and today’s number relieves some of those fears.” He added, “The case for rate cuts got a little stronger today.”

    All three major Wall Street indexes were poised for weekly gains as yields on government bonds dropped after the release of the data. The CBOE Volatility index, known as the “fear gauge,” reached its lowest level in a month.

    The recent economic indicators followed the Fed’s dovish interest rate guidance in its latest policy meeting. Fed Governor Michelle Bowman stated that inflation should continue to decline even as the Fed maintains current interest rates.

    Apple’s stock surged by 6.7% after the company announced a record $110 billion share buyback program and exceeded modest expectations for quarterly results and forecasts. The technology sector led the gains, climbing 3%.

    Amgen rose by 13.1% as the biotechnology firm hinted at positive data from a mid-stage study of its experimental weight-loss drug MariTide.

    By midday, the Dow Jones Industrial Average had risen by 1.13%, the S&P 500 gained 1.10%, and the Nasdaq Composite increased by 1.90%.

    However, Expedia experienced a setback, dropping by 14.1% after the online travel agency reduced its full-year revenue growth forecast due to a decline in gross bookings on its vacation rental platform.

    Out of the S&P 500 companies that reported earnings in the first quarter, 76.8% surpassed analysts’ expectations, exceeding the historical average.

    On the NYSE, advancing issues outnumbered decliners by a ratio of 3.35-to-1, while on the Nasdaq, the ratio stood at 2.13-to-1. The S&P 500 and Nasdaq also recorded new highs.

    The positive market sentiment stemmed from the soft job data, fueling hopes of potential rate cuts by the Fed, and strong performances by tech giants like Apple, which announced a significant share buyback program. Amgen’s promising developments in the biotech sector further bolstered investor confidence.

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