Global markets continue sell-off after a solid U.S. NFP jobs report

Avatar photo

Vrasidas Neofytou
Head of Investment Research

See all articles
Global markets continue sell-off after a solid U.S. NFP jobs report
Financial markets around the world continued their downward trend momentum on Monday morning due to a broader risk aversion sentiment as investors worry that last Friday’s stronger-than-expected U.S. NFP-employment data will keep the Federal Reserve on an aggressive path of interest rate hikes.

Traders extremely experienced volatility last week, with the S&P 500 index bouncing 5% on Monday-Tuesday, recording its largest two-day gains since 2020 before resuming losses on the following days after the hotter-than-expected U.S. Nonfarm Payrolls report for September last Friday, sparking fear that the Federal Reserve would continue hiking rates aggressively.

The S&P 500 index lost 3%, the tech-heavy Nasdaq Composite plunged nearly 4% while dollar and bond yields jumped to weekly highs on Friday after the release of the U.S. unemployment rate which came at 3,5% for September versus the forecast of 3.7%, an indication that the U.S. labor and corporate market remains strong and resilient despite efforts by the Federal Reserve to slow the economy, and the headwinds of the global energy crisis.

S&P 500 index, Daily chart

After Friday’s jobs report, market participants are now pricing in a nearly 75% chance the Federal Reserve will raise interest rates by another 75 basis points in the next FOMC policy meeting on November 02, and a 60% chance for another 50 basis points hike on December 14.

The Federal Reserve has raised interest rates five times this year for a total of 3 percentage points and is expected to continue hiking through at least the mid-2023, to bring down inflation running near its highest annual rate in more than 40 years.

On top of that, the U.S. stock futures were also lower by 0,50% in early premarket trade on Monday, with traders looking ahead to a key U.S. CPI inflation data for September on Thursday which will be a catalyst into the Fed’s stance on interest rates, and the beginning of corporate earnings season.

Asia-Pacific markets also settled into the deep red this morning following the negative market sentiment, with Hong Kong’s Hang Seng index leading losses by nearly 3% as Chinese chipmakers listed in the city plunged following new export rules from the U.S.

A similar bearish trend is seen in Europe this morning as well, with the pan-European Stoxx 600 falling 0.5% in early trade, led by tech stocks following the overnight selloff in the tech sector in Asia.

Important Information: This communication is marketing material. The views and opinions contained herein are those of the author(s) on this page, and may not necessarily represent views expressed or reflected in other Exclusive Capital communications, strategies or funds. This material is intended to be for information purposes only and is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument.

Read our detailed Marketing Communication Disclaimer

SHARE

CONNECT WITH OUR TEAM

Explore the ways in which we can help you achieve your investment goals.

OUR PARTNERS
bdo

EXTERNAL AUDITOR

ey

LEGAL ADVISOR

lgt

CUSTODIAN BANK

efg

APPROVED PARTNER

Raiffeisen

DEPOSITORY BANK

Prime Fund

GROUP MEMBER

c