The Dow Jones was trading higher by 0.58% thirty minutes after the release of the September US Non-farm payrolls (NFP). The number printed 136K vs. the 145K the projected. However, the prior number was revised higher by 38k to 168K. Seen over two months the US NFPs have held up better than what the market projected and can explain why the Dow Jones future was higher following the news.
Also, supporting the stock markets was a lower annual wage growth than projected. Annual salaries increased by a healthy 2.9% vs. 3.2% in the prior month and expected. Lower than projected wage growth will allow the Federal Reserve to be more aggressive with rate cuts, which could further help the stock market to reach a soft landing.
The only issue with the labor market report is that it is not a leading indicator of economic growth. Nonetheless, the markets are higher on relief that the labor market was not as bad as the ISM reports of this week had suggested.
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In the very short-term, the trend of the Dow Jones was upwards above today’s low of 26108 and as long as the price trades above this level the price might seek itself higher following the last few days decline. The next strong resistance level is the September 24 low of 26704. However, on a break to today’s low, the Dow Jones might try to reach the October 2 low at 25982, followed by yesterday’s low of 25749.Download our latest quarterly market outlook for our longer-term trade ideas.
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