Penktadienis, 15 lapkričio, 2024
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How US Stocks Hit Record Highs Thanks to Surprising Economic Data

The US stocks ended the week on a high note, with all three major indexes rising 0.4% on Friday and the S&P 500 hitting a new record for 2023. This rally was fueled by surprising economic data that beat expectations and boosted hopes for a smooth economic recovery. The main factors behind this optimism were a strong nonfarm payrolls report, a sharp drop in the unemployment rate, and a jump in the University of Michigan’s consumer sentiment index.

Nonfarm Payrolls and Unemployment Rate

The market was pleasantly surprised by the nonfarm payrolls data for November, which showed that the economy added 199,000 jobs. This was higher than the market forecast of 180,000 and showed resilience in the labor market. The unemployment rate also impressed, falling to a four-month low of 3.7%, below market projections of 3.9%.

The lower unemployment rate was accompanied by a significant increase in the number of employed people. Rising by 757,000 to 161.969 million. These numbers, along with a slight increase in the labor force participation rate to 62.8%. Indicated a healthier employment situation and dispelled fears of a slowing labor market.

Consumer Sentiment and Inflation Expectations

The University of Michigan’s consumer sentiment index also showed a positive trend, soaring to 69.4 in December from 61.3 in the previous month. This exceeded market expectations and reflected increased confidence among consumers. Notably, the measure of inflation expectations for the next year dropped to 3.1%, the lowest level since March 2021, suggesting a more optimistic outlook on inflation.

The five-year inflation outlook also declined to 2.8% from 3.2% the previous month. This decrease can be explained by falling energy prices and the effect of recent interest rate increases, implying a favorable environment for consumers and possibly affecting the Federal Reserve’s choices on future rate reductions.

Market Performance and Notable US Stocks Movements

In light of these positive economic indicators, stock markets did well, with all three major indexes completing a six-week winning streak. Notable stock movements included Lululemon Athletica, which rose 5.4% on the basis of strong quarterly results. Paramount saw a surge of 12% following reports of possible acquisitions by Skydance Media and RedBird Capital. Boeing and Uber also made gains, with the latter reaching a 33-month high of $61.9.

Lululemon Athletica price chart
Lululemon Athletica price

Bitcoin vs. Gold

We periodically announce the Bitcoin Gold Ratio, which shows both us and all of you what is currently a better investment. And not just as an alternative to Bitcoin Gold. BGR also indicates other alternatives concerning Bitcoin.

We have been observing for a long time that investments in Bitcoin have been, and perhaps still remain, a very good investment in recent years. We are highly optimistic that this trend will continue in the near future, possibly even up to the next halving.

Bitcoin Gold Ratio shows, that bitcoin is better now.
Bitcoin Gold Ratio

Conclusion

The US stock market ended the week on a positive note, reaching new highs for 2023. This was driven by encouraging economic data that surpassed expectations and signaled a robust economic recovery. The key factors that contributed to this optimism were a solid nonfarm payrolls report, a low unemployment rate, and a high consumer sentiment index.

These indicators showed strength in the labor market, confidence in the economy, and a lower inflation outlook. As a result, the stock market performed well, with several notable stocks rising significantly. The US economy seems to be on a solid footing, despite the challenges posed by the pandemic and the global uncertainty.

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