Strong Jobs Report Has The U.S. Indices In The Green

Posted Friday, January 4, 2019 by
Shain Vernier • 2 min read

A strong U.S. employment report is this morning’s big story on Wall Street. Subsequently, the U.S. indices have posted a bullish opening hour of trade, paring the losses of Thursday’s session. With panic surrounding Apple and U.S./China trade tensions momentarily subsiding, the DJIA(+440), S&P 500 (+49), and NASDAQ (+150) have experienced some nice early-session gains.

A Positive Jobs Report Has U.S. Stocks On The Bull

The first U.S. employment report of 2019 has come back extremely positive, showing growth in earnings as well as in December hirings. Here is a quick rundown of the numbers:

Event                                                               Actual               Projected

Average Hourly Earnings (YoY, Dec.)             3.2%                    3.0%

Average Weekly Hours (Dec.)                           34.5                    34.5

Nonfarm Payrolls (Dec.)                                    312K                  177K

Unemployment Rate (Dec.)                               3.9%                  3.7%

While the Unemployment Rate (Dec.) did rise above projections and the previous release, it is still below the long-term benchmark rate of 4.0%. However, Nonfarm Payrolls did shatter expectations, coming in at 312,000 for December. This figure is undoubtedly a result of seasonal holiday hirings but is still grabbing headlines as a market driver.

In addition, Average Hourly Earnings (YoY, Dec.) have come in above expectations at 3.2%. If you take into account the growth in wages as well as the NFP bump, then the FED may be prompted to continue on its path of gradual tightening sooner rather than later.

A Comeback For The NASDAQ?

After Thursday’s meltdown of Apple stock, the March E-mini NASDAQ looks to be in recovery mode.

March E-mini NASDAQ Futures (NQ), Daily Chart
March E-mini NASDAQ Futures (NQ), Daily Chart

Here are the levels to watch for the remainder of the session:

  • Resistance(1): Bollinger MP, 6454.00
  • Support(1): 38% Current Wave, 6184.25

Overview: The intermediate-term downtrend of late 2018 is being challenged in the NASDAQ. Values are on the rise and well above the 38% Current Wave Retracement (6184.25). As long as this area holds as valid support, then a test of topside resistance in the neighborhood of 6500.00 is highly probable for the near future.

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