Market Review
Dollar Slumps After U.S. Jobs Report Disappoints. The dollar slumped on Friday, stung by a
September U.S. jobs report depicting slower hiring, which raised doubts the economy was strong enough for
the Federal Reserve to raise U.S. interest rates this year as had been widely anticipated. The data marked the
smallest two-month gain in employment in over a year and could fuel fears that a China-led global economic
slowdown may sap America's strength. The dollar fell sharply two weeks ago after the Fed once again kept
rates at historic lows. But the currency had gained around 2.5 percent through Friday, as Fed Chair Janet Yellen
and other U.S. policymakers kept alive the prospect later this year of a rate rise. Sterling Rises on Strong U.K. Construction Data. The pound rose against the U.S. dollar on Friday,
after data showed that construction activity in the U.K. expanded at the fastest rate since March last month.
Research group Markit said on Friday that its U.K. construction purchasing managers' index rose to a sixmonth
high of 59.9 in September from a reading of 57.3 in August. Analysts had expected the index to tick up
to 57.5 last month. On Thursday, Markit reported its U.K. manufacturing purchasing managers’ index eased to
51.5 in September from a revised reading of 51.6 in August. Economists had expected the index to tick up to
51.3. Aussie Fluctuate Ahead of RBA Meeting. The Australian dollar fluctuated against U.S. dollar on Friday
ahead Reserve Bank of Australia monetary policy meeting next week. On Thursday morning, the International
Monetary Fund released a report on Australia that said it was optimistic about the country's ability to navigate
its way out of the recent slump caused by the slowing mining boom, but suggested the Reserve Bank of
Australia could cut rates if the rate of recovery remains slow. On economic front, Australian Bureau of
Statistics said Australian retail sales rose 0.4% in August from a month earlier. The increase, in line with
expectations, followed a 0.1% drop in July. U.S. Economy Creates Just 142,000 New Jobs in September. The number of new jobs created in
September slowed sharply for the second straight month, raising the specter that pace of hiring in the U.S. has
tapered off amid fresh worries about a weaker global economy. The economy added a seasonally adjusted
142,000 jobs in September, following an even smaller gain in the prior month, the Labor Department reported
Friday. Economists had been expecting the report to show 202,000 new jobs, from the downwardly revised
136,000 in August from the originally reported 173,000. The unemployment rate was unchanged at 5.1%,
though more people dropped out of the labor force. The percentage of Americans in the labor force fell to the
lowest level since October 1977.
Asian Stocks Subdued Ahead of U.S. Jobs. Asian stocks were mixed on a subdued Friday, losing steam
after two straight days of stellar gains, as investors awaited the crucial U.S. nonfarm payrolls report for
September due later in the day. Hong Kong stocks led the region's gainers with a 2.6 percent rise, lifted by a
bounce in the Chinese Enterprise Index which tracks Chinese companies listed in Hong Kong, after latest
policy steps to shore up the flagging economy. Australia's shares fell 1.1 percent while Japan's Nikkei Average
fell 0.4 percent. China is shut for a week-long holiday and India is closed for a local holiday. Beijing on
Wednesday said it would cut the minimum down payment level for first-time home buyers in many cities, the
second policy measure in two days to fire up Chinese consumption. European Stocks Shrug Off U.S. Jobs Report to End Higher. European stock markets on Friday
snapped back after firm losses fueled by a disappointing U.S. jobs report. Investors turned their attention to the
potential benefits of a weak labor market in the world’s largest economy, helping reignite buying appetite. The
big news for global equity markets on Friday was the disappointing non-farm payrolls data from the U.S. The
country created 142,000 jobs in September, way below the 203,000 expected, bringing into question whether
an interest rate hike by the U.S. Federal Reserve is still on the cards this year. The unemployment rate
remained at 5.1 percent. Some analysts said the lackluster U.S. jobs data probably pushes a interest-rate hike by
the Federal Reserve into 2016. Germany’s DAX 30 index ended 0.45% higher, while France’s CAC 40 index
rose 0.75%. The U.K.’s FTSE 100 index climbed almost 1%, propped up by mining firms and banks. The
index was also boosted by the U.K. construction purchasing managers index for September, which hit a 7-
month high at 59.9. U.S. Stocks Advance as Commodity Shares Rally Amid Jobs Report. U.S. stocks closed more than
1 percent higher Friday, recovering from an initial decline of more than 1.5 percent, as investors digested
higher oil prices and a weaker-than-expected jobs report. The major averages closed at session highs, with the
Dow Jones industrial average up 200 points after earlier falling as much as 258 points, to closed at 16,472.37,
meanwhile the S&P 500 gained 27.53 points, to 1,951.35. The Dow and S&P 500 closed up more than 1
percent for their biggest intraday upside reversal since Oct. 4, 2011. The Nasdaq composite closed up 1.5
percent to 4,707.78 for its biggest reversal since Aug. 12. The major averages ended the week more than 1
percent higher, with the S&P 500 out of correction territory, or within 10 percent of its 52-week high. The Dow
and Nasdaq remained in correction territory. Gold Posts Best Day Since January After Weak U.S. NFP. Gold prices jumped more than 2 percent
on Friday and post its biggest daily gain since January on a flurry of short-covering as dismal U.S. jobs data
dented expectations the Federal Reserve will raise interest rates this year. Investors raced to cover bearish short
bets and some put on new longs after U.S. Labor Department data showed payrolls outside of farming rose by
142,000 last month, much lower than the 203,000 expected. Gold had earlier slid to its lowest in two weeks on
expectations for an upbeat jobs report that would support the case for a near-term rate rise. That would lift the
opportunity cost of holding non-yielding bullion while boosting the dollar. Crude Rises After Big Drop in U.S. Rig Count. Crude prices erased early losses to rise more than 2
percent on Friday after a report showing the fifth weekly decline in the U.S. oil rig count renewed the debate
over falling production in the world's top oil consumer. Softer-than-expected U.S. jobs data and other economic
statistics had weighed on oil earlier, along with reduced threats to oil installations in the U.S. East Coast from
Hurricane Joaquin. U.S. energy companies this week cut the number of rigs drilling for oil by 26, a weekly
survey by oil services company Baker Hughes showed. It was the largest number of rigs idled in a week since
April. The data turned around oil prices that had been down about 1 percent earlier.
Wal-Mart to Cut 450 Jobs at its Headquarters. Wal-Mart Stores Inc. CEO Doug McMillon said 450
people will be laid off at the company’s headquarters in Bentonville, Ark., according to a memo sent to all
Wal-Mart staff today. “After months of evaluation, we’ve concluded there is an opportunity to better position
our Home Office teams to move with speed and purpose,” McMillon wrote in the memo. The company is at “an important time in our history,” he said. “This in part means pulling back in some areas and investing in
others.” Laid-off employees will receive 60 days of pay, plus two weeks of pay for every year of employment
with the company, said a Wal-Mart spokesman. Job search assistance will be available for those who want it,
he said
Google Stock Could Soar to $905 in a Year, Analyst Says. Google Inc. was upgraded to outperform
from perform at Oppenheimer on Friday. The brokerage also raised its 12 to 18-month price target to $700
from $670, which implies potential upside of 9% from Thursday's closing price, though the analysts said the
stock could get as high as $905. Oppenheimer cited accelerating YouTube usage, now growing at the fastest
pace in more than two years, as well as new ad products that compete better with those offered by Facebook
Inc. for the upgrade.
