By Sinéad Carew and Amruta Khandekar

(Reuters) – Wall Street’s main stock indexes gained on Friday as bond yields fell sharply as data showed signs of slowing U.S. jobs growth and an uptick in unemployment, boosting hopes that the Federal Reserve is done with its interest rate hiking campaign.

The Labor Department’s report showed nonfarm payrolls increased by 150,000 jobs in October, much less than the expected 180,000 increase, partly due to strikes at Detroit’s Big Three automakers.

Data for the last month was revised lower to show an increase of 297,000 instead of 336,000, while the unemployment rate edged up to 3.9%.

The reading bolstered the view that the Fed had reached the end of its rate hikes. U.S. Treasury yields fell for the fourth consecutive session, with the benchmark 10-year Treasury yield hitting its lowest level in more than five weeks before trading last at 4.5538%.

“Falling interest rates is probably the top catalyst this week,” said Tony Welch, CIO of SignatureFD, Atlanta Georgia, adding the jobs report supported this trend.

“The Fed has had a difficult time getting their monetary policy to actually loosen the labor market,” he said, noting that Friday’s data suggests the market is looser, leading to investors’ “interpretation that the Fed may be done with a tightening cycle.”

Welch also noted that solid earnings reports were helping stocks as companies have expanded profit margins.

All three major Wall Street indexes were on course for their biggest weekly percentage gain in about a year. The Russell 2000 index of small cap companies was on track for its biggest weekly gain since February 2021.

The Dow Jones Industrial Average rose 269.53 points, or 0.8%, to 34,108.61, the S&P 500 gained 47.62 points, or 1.10%, to 4,365.4 and the Nasdaq Composite added 191.77 points, or 1.44%, to 13,485.96.

The tech-heavy Nasdaq was on track for its sixth straight day in the green while the S&P 500 and the Dow looked set for their fifth consecutive session of gains.

Most major S&P 500 sectors traded in the green, led by real estate, up 3%, after hitting its highest since late September. Only the energy sector was losing ground, last down more than 1%.

The small-cap Russell 2000 index was up 2.8%, touching its highest level since Oct. 17.

Megacap stocks were gaining with Nvidia up 3.5% and Alphabet up 1.2% while Microsoft rose 1.6%.

Apple was an outlier, down 1.3% after its sales forecast for the holiday quarter fell short of Wall Street expectations.

Still analysts expect earnings growth of 5.7% for S&P 500 companies in the third quarter, with over 81% of the 403 companies in the benchmark index that have reported profits so far having beaten estimates, per LSEG data.

Meanwhile, the CBOE volatility index touched a fresh six-week low, reflecting easing investor anxiety.

Among major movers, Fortinet dropped 16.5% on a downbeat fourth-quarter revenue forecast.

Block jumped 10.3% after raising its annual adjusted profit forecast.

Advancing issues outnumbered declining ones on the NYSE by a 5.97-to-1 ratio; on Nasdaq, a 3.80-to-1 ratio favored advancers.

The S&P 500 posted 19 new 52-week highs and no new lows; the Nasdaq Composite recorded 46 new highs and 62 new lows.

(Reporting by Sinéad Carew in New York, Amruta Khandekar and Shristi Achar A; Editing by Sriraj Kalluvila, Maju Samuel and David Gregorio)

By Amruta Khandekar and Shristi Achar A

(Reuters) -Wall Street’s main stock indexes gained on Friday after data pointing to slowing job growth and an uptick in the unemployment rate boosted investor expectations that the Federal Reserve was done with its monetary policy tightening campaign.

The Labor Department’s report showed nonfarm payrolls increased by 150,000 jobs in October, against expectations of a 180,000 increase, partly due to strikes at Detroit’s Big Three automakers.

Data for the last month was revised lower to show an increase of 297,000 instead of the 336,000 reported previously, while the unemployment rate edged up to 3.9%.

The reading bolstered the view that the Fed had reached the end of its rate hikes.

Such hopes, coupled with upbeat earnings reports, have put all three major Wall Street indexes on course for their biggest weekly percentage gain in about a year.

“The next discussion is, when do they (the Fed) cut rates? That got taken out of 2024 and it looks now like it’s being priced back in,” said Paul Nolte, senior wealth adviser and market strategist for Murphy & Sylvest Wealth Management.

“The Fed’s focus right now is strictly on inflation. The economy is weakening and their hope is that weakening will filter through to inflation.”

Traders’ bets that the Federal Reserve would hold interest rates steady in December rose to 95.4% from around 83% before the data, while pricing in a rate cut possibility in May against expectations in June earlier.

Treasury yields continued to slide after the report, with the benchmark 10-year Treasury yield falling to its lowest in five weeks, last at 4.547%.

That boosted megacap growth stocks Tesla, Nvidia and Alphabet, up between 0.4% and 2.6%. The tech-heavy Nasdaq was on track for its sixth straight day in the green.

Apple was an outlier, down 1.3% after its sales forecast for the holiday quarter fell short of Wall Street expectations.

Analysts expect earnings growth of 5.7% for S&P 500 companies in the third quarter, with over 81% of the 403 companies in the benchmark index that have reported profits so far having beaten estimates, per LSEG data.

Most major S&P 500 sectors traded in the green, led by real estate, which jumped 3.3% to an over one-month high.

The small-cap Russell 2000 index advanced 2.8%, touching its highest level in two weeks.

Meanwhile, the CBOE volatility index touched a fresh six-week low, reflecting easing investor anxiety.

At 11:50 a.m. ET, the Dow Jones Industrial Average was up 234.26 points, or 0.69%, at 34,073.34, the S&P 500 was up 42.50 points, or 0.98%, at 4,360.28, and the Nasdaq Composite was up 157.17 points, or 1.18%, at 13,451.36.

Among major movers, Fortinet dropped 16.5% on a downbeat fourth-quarter revenue forecast.

Block jumped 12.3% on raising its annual adjusted profit forecast.

Advancing issues outnumbered decliners by a 6.10-to-1 ratio on the NYSE and by a 4.24-to-1 ratio on the Nasdaq.

The S&P index recorded 17 new 52-week highs and no new low, while the Nasdaq recorded 42 new highs and 51 new lows.

(Reporting by Amruta Khandekar and Shristi Achar A; Editing by Sriraj Kalluvila and Maju Samuel)

By Caroline Valetkevitch and Harry Robertson

NEW YORK/LONDON (Reuters) -Global stock indexes rose, the dollar weakened and benchmark 10-year U.S. Treasury yields fell to five-week lows on Friday after data showed U.S. job growth slowed more than expected in October, underscoring views that the Federal Reserve may be done hiking interest rates.

Two-year yields also were the lowest since early September after the data, which showed U.S. job growth slowed in part as strikes by the United Auto Workers (UAW) union against Detroit’s “Big Three” car makers depressed manufacturing payrolls.

The data also showed the increase in annual wages was the smallest in nearly 2-1/2 years, pointing to an easing in labor market conditions.

“The good news here is that the slowdown will likely keep the Fed on the sidelines going forward,” said Brad McMillan, chief investment officer for Commonwealth Financial Network in Waltham, Massachusetts.

“One of their key concerns has been an overheated economy, especially after last quarter’s GDP growth, and this suggests that problem is going away.”

Wednesday’s U.S. central bank decision to leave rates unchanged and comments by Fed Chair Jerome Powell indicated to some investors that the Fed may be done raising rates. The Bank of England on Thursday also left rates unchanged.

Central bank officials however stressed that more may need to be done to tackle inflation.

Benchmark 10-year yields fell as low as 4.527%, the lowest since Sept. 29. Two-year note yields reached 4.847%, the lowest since Sept. 1.

A decision on Wednesday by the U.S. Treasury to issue less long-term debt than expected also fuelled the rally in bonds, as did data on Thursday suggesting the U.S. economy might finally be cooling.

The Dow Jones Industrial Average rose 171.28 points, or 0.51%, to 34,010.36, the S&P 500 gained 35.58 points, or 0.82%, to 4,353.36 and the Nasdaq Composite added 129.78 points, or 0.98%, to 13,423.97.

Apple shares were down 1.4%, a day after the company reported quarterly results and warned of a dull holiday quarter.

The pan-European STOXX 600 index rose 0.23% and MSCI’s gauge of stocks across the globe gained 1.07%.

The dollar index fell 0.942%, with the euro up 0.93% to $1.0719.

The Japanese yen strengthened 0.65% versus the greenback at 149.45 per dollar, while Sterling was last trading at $1.2345, up 1.18% on the day.

In commodities, U.S. crude recently fell 1.55% to $81.18 per barrel and Brent was at $85.53, down 1.52% on the day.

Spot gold added 0.4% to $1,993.82 an ounce.

(Reporting by Caroline Valetkevitch in New York and Harry Robertson in London; additional reporting by Chibuike Oguh in New York; editing by Jacqueline Wong, Miral Fahmy, Alison Williams and Mark Heinrich)

By Amruta Khandekar and Shristi Achar A

(Reuters) – Wall Street’s three main indexes gained on Friday after data pointing to slowing job growth and an uptick in the unemployment rate boosted investor expectations that the Federal Reserve was done with its monetary policy tightening campaign.

The Labor Department’s report showed nonfarm payrolls increased by 150,000 jobs in October, against expectations of a 180,000 increase, partly due to strikes at Detroit’s Big Three automakers.

Data for the last month was revised lower to show an increase of 297,000 instead of the 336,000 reported previously, while the unemployment rate edged up to 3.9% against expectations it would stay steady 3.8%.

The reading, which came on the heels of a mixed set of labor data this week, bolstered the view that the Fed had reached the end of its rate hikes.

“It (the report) is consistent with the views of the market that the job market and the economy is decelerating and that’s going to keep the Fed on hold and will cause central banks next year to cut rates,” said Jay Hatfield, chief executive officer at Infrastructure Capital Management.

Traders’ bets that the Federal Reserve would hold interest rates steady in December rose to 90% from around 83% before the data, while pricing in a rate cut possibility in May, against expectations in June earlier.

A slide in Treasury yields boosted most megacap growth stocks, with Tesla, Nvidia and Alphabet up between 0.8% and 2.2%.

The benchmark 10-year Treasury yield fell to its lowest in five weeks after the payrolls data and was last at 4.4921%.

Apple pared losses and was last down 1.9% after its sales forecast for the current quarter fell short of Wall Street expectations, even as an uptick in iPhone sales lifted fourth-quarter results above estimates.

Wall Street’s main indexes rallied on Thursday, with the S&P 500 logging its biggest one-day percentage gain since April.

The recent inflow of strong corporate updates have also kept the major indexes on track for their biggest weekly gain in about a year. Of the 376 firms in the S&P 500 that have reported so far, nearly 81% have beaten earnings estimates, as per LSEG data.

Most major S&P 500 sectors traded in the green, with real estate leading gains, up 2.7%.

Meanwhile, the CBOE volatility index touched a fresh six-week low, last down 0.55 at 15.09 points.

At 9:41 a.m. ET, the Dow Jones Industrial Average was up 149.26 points, or 0.44%, at 33,988.34, the S&P 500 was up 29.28 points, or 0.68%, at 4,347.06, and the Nasdaq Composite was up 83.85 points, or 0.63%, at 13,378.04.

Among major movers, Fortinet dropped 17.3% as the cybersecurity firm forecast fourth-quarter revenue below Wall Street estimates.

Coinbase shares fell 1.3% after the cryptocurrency exchange’s trading volumes declined for the second quarter in a row.

Block jumped 14.1% after the payments firm raised its annual adjusted profit forecast.

Advancing issues outnumbered decliners by a 7.76-to-1 ratio on the NYSE and by a 4.81-to-1 ratio on the Nasdaq.

The S&P index recorded 13 new 52-week highs and no new low, while the Nasdaq recorded 31 new highs and 30 new lows.

(Reporting by Amruta Khandekar and Shristi Achar A; Editing by Sriraj Kalluvila and Maju Samuel)

(Reuters) – Wall Street’s main indexes opened higher on Friday after data pointing to slowing job growth boosted expectations that the Federal Reserve was done with its rate hikes, while Apple shares slipped on a weak holiday-quarter forecast.

The Dow Jones Industrial Average rose 149.75 points, or 0.44%, at the open to 33,988.83. The S&P 500 opened higher by 16.45 points, or 0.38%, at 4,334.23, while the Nasdaq Composite gained 68.66 points, or 0.52%, to 13,362.85 at the opening bell.

(Reporting by Amruta Khandekar; Editing by Maju Samuel)

By Harry Robertson

LONDON (Reuters) -Global stocks extended their gains on Friday after data showed the U.S. economy added fewer jobs than expected in October, bolstering investors’ hopes that the Federal Reserve is finished hiking interest rates.

The dollar tumbled after the data, which showed that the U.S. nonfarm payrolls rose by 150,000 in October, lower than the 180,000 predicted and September’s downwardly revised 297,000 figure.

Equities remained on track for their biggest weekly rise in a year after the Fed left interest rates steady for a second meeting running on Wednesday and the Bank of England followed suit on Thursday, helping bond yields to tumble.

MSCI’s index of world stocks was last up 0.45%, having traded roughly 0.26% higher before the data. It was on track to finish the week 4.5% higher, which would be the largest weekly rise since November 2022.

The dollar index, which tracks the currency against its major peers, was last down 0.74% at 105.45. It traded 0.29% lower at 105.89 before the data.

Futures for the S&P 500 stock index rose and were last up 0.37%, after the index jumped 1.9% the previous day.

“Investors will interpret today’s jobs weak jobs report as a sign that demand is slowing in the labour market,” said Richard Flynn, managing director at Charles Schwab UK, in emailed comments.

“For central bankers, a loosening labour market is another reason to lean away from further interest rate hikes – something investors might view as a silver lining.”

Europe’s benchmark Stoxx 600 equity index was up 0.25% on Friday, after trading around 0.1% higher before the nonfarm payrolls. It was set for a weekly increase of 3.5%.

The 10-year U.S. Treasury yield was last down 10 basis points (bps) at 4.572%, having traded 3 bps lower at 4.639% previously.

The yield, the reference for borrowing rates around the world, dropped 20 basis points over the Wednesday and Thursday sessions after the Fed and BoE meetings.

Central bank officials stressed that more may need to be done to tackle inflation, but many investors believe the next move in borrowing costs is likely to be down.

“Once the market can become convinced that all these central banks are on hold … that can encourage bond yields to move lower,” said Samuel Zief, head of global FX strategy at JPMorgan Private Bank.

A decision on Wednesday by the U.S. Treasury to issue less long-term debt than expected also fuelled the rally in bonds, as did data on Thursday suggesting the U.S. economy might finally be cooling.

Oil prices were down for the week, in part because the Israel-Hamas war has not widened as some feared. Brent crude oil futures were 3.4% lower since Monday at $87.33 a barrel, although were up 0.5% on Friday.

(Reporting by Harry Robertson; editing by Jacqueline Wong, Miral Fahmy, Mark Heinrich and Alison Williams)

(Reuters) – U.S. stock index futures turned positive on Friday as a weaker-than-expected job growth report underscored investor expectations that the Federal Reserve was done with its tightening campaign.

The Labor Department’s report showed nonfarm payrolls increased by 150,000 jobs in October, against expectations of a 180,000 increase.

While the unemployment rate was 3.9%, higher than expectations of remaining steady at 3.8%, the average earnings grew 0.2% on a monthly basis, compared with forecasts of 0.3% growth.

At 8:31 a.m. ET, Dow e-minis were up 110 points, or 0.32%, S&P 500 e-minis were up 13.25 points, or 0.31%, and Nasdaq 100 e-minis were up 37.75 points, or 0.25%.

(Reporting by Shristi Achar A in Bengaluru; Editing by Maju Samuel)

By Victoria Waldersee

BERLIN (Reuters) -BMW forecast strong fourth quarter sales on Friday and said its order book was filled into the first few months of next year, with executives adding they saw no need to cut prices as some rival automakers have.

Vehicle availability was improving as supply chain bottlenecks eased, though higher material and logistics costs persisted, particularly for labour, the German group said.

Shares were up 3.3% at 1035 GMT, with third-quarter results largely in line with expectations and delivered in a more optimistic tone than some competitors, which warned of a subdued market environment curbing demand.

Pressed on whether BMW felt the need to cut prices to boost electric vehicle demand, particularly in China where a battle for market share has raged this year, Chief Executive Oliver Zipse said this approach was not in BMW’s playbook.

“We have no interest in sinking prices to gain market share. That’s not our strategy. And as you can see, we are managing to grow substantially even with very acceptable prices,” he said.

The premium carmaker has forecast an annual margin on earnings before interest and taxes (EBIT) in its cars division of 9.0%-10.5% and is on course to hit that target with a 10.3% margin so far this year, it said.

Higher-priced and fully electric cars boosted quarterly revenues above expectations of eight analysts polled by LSEG to 38.5 billion euros ($40.92 billion), but group net profit fell 7.7% after last year’s figure benefited from a one-off boost when BMW took majority control of its Chinese joint venture.

The company saw some slight relief in raw material prices in the quarter versus last year but nonetheless felt an impact of 200 million euros from the net balance of currency and raw material positions, Chief Financial Officer Walter Mertl said.

Materials and logistics costs remain high, with a notable negative impact across the first nine months of 2023 due to factors including high labour costs from partners, he added.

In a statement, BMW made no mention of high interest rates or inflation weighing on growth, in contrast to competitors such as Mercedes-Benz and Porsche.

Fully electric sales hit 15.1% of total sales in the third quarter, outstripping BMW’s end-year target of 15%. Models from the upper price segment, like the 7 Series, the updated BMW X7, and the BMW X5 and BMW X6 models, are also driving sales growth.

Free cash flow for the automotive business so far this year came in at 5.7 billion euros, near the full-year forecast of 6 billion.

($1 = 0.9409 euros)

(Reporting by Victoria Waldersee, Christina Amann; Editing by Elaine Hardcastle and Mark Potter)

By Alistair Smout

LONDON (Reuters) -Billionaire Elon Musk welcomed China’s engagement on artificial intelligence safety and said he wanted to see Beijing aligned with Britain and the United States on the subject, speaking in London on Thursday alongside British Prime Minister Rishi Sunak.

Musk backed China’s inclusion in the first AI Safety Summit, hosted at Bletchley Park, England, which has drawn leading companies and nations together to agree initial steps on how to manage the risks of cutting-edge AI models.

“If the United States and the UK and China are aligned on safety, then that’s going to be a good thing, because that’s where the leadership is generally,” he said.

Musk, who was in May given royal-like treatment during a visit to China, welcomed that Beijing had participated in AI safety talks at the event.

“Having them here I think was essential, really. If they’re not participants, it’s pointless.”

Sunak interviewed Musk – feted by Britain as a star guest at the two-day summit – on a small stage in a gilded room at London’s Lancaster House, one of the government’s most opulent venues, which is often used for diplomatic functions.

Self-confessed tech geek Sunak said he felt “privileged and excited” to host Musk and used the occasion to make a not-so-subtle investment pitch when the Tesla and SpaceX founder said startup firms needed high rewards to take risks in the sector.

“We very much have a tax system that supports that,” Sunak said.

MAGIC GENIE

The eclectic discussion took place in front of an invited audience of dozens of other business leaders, the final event in a two-day summit seen as a big step forward in harnessing AI for good by starting to think about the serious risks it may pose.

Musk and Sunak agreed on the possible need for physical “off-switches” to prevent robots from running out of control in a dangerous way, making reference to “The Terminator” film franchise and other science-fiction films.

“All these movies with the same plot fundamentally all end with the person turning it off,” Sunak said, adding that the importance of physical off switches had formed part of the discussions at the summit earlier in the day.

Musk told Sunak he thought AI was “the most disruptive force in history”, speculating the technology would be able to “do everything” and make employment as we know it today a thing of the past.

“I don’t know if that makes people comfortable or uncomfortable,” he said.

“It’s both good and bad. One of the challenges in the future will be, how do we find meaning in life if you have a magic genie that can do everything you want?”

(Reporting by Alistair Smout; Writing by William James; Editing by Paul Sandle and Jamie Freed)

Capital Group: Pull Back Presents Unique Equities Investment Opportunity

There is an opportunity for investors to load on equities after three months of pullback from this year’s highs. Those are sentiments echoed by strategists at Capital Group in the aftermath of the US Federal Reserve pausing on interest rates for the second consecutive time. According to Andy Budden as the $2.3 trillion manager, the time might be ripe to scan for opportunities in the equity market as central banks peak on monetary policy tightening.

Equity Bounce Back

The sentiments come against the backdrop of the tech-heavy index NASDAQ pulling back by about 7% from its all-time highs over the past three months. The S&P 500 is also down by about 9% from its peak in what is being interpreted as a small correction after a blockbuster rally in the first half of the year. In recent weeks, optimism has been streaming into the market as investors look for bargains following the correction.

Renewed confidence in equities comes from the Fed keeping interest rates in the range of 5.25% and 5.5% at its latest meeting. It also comes on the central bank’s indication that economic activity expanded at a strong pace in the third quarter, averting growing concerns about a potential slowdown amid the high-interest rate environment. Reports that the economy is growing at a solid pace should continue to fuel demand for risk in the market, of which equities are likely to be one of the beneficiaries after the recent correction.

A recent yield spike heightens the prospects of the Fed going slow on rate hikes at its December meeting. That’s because tighter financial conditions have succeeded in partially achieving the FedS goals, with inflation levels having dropped significantly. Stocks and bonds are likely to continue edging higher on growing expectations that the Fed is nearing the end of its historic tightening campaign.

improving Equities Outlook

Strategists at Capital Group believe now could be the best time for investors to start acting, given the divergence between asset classes and cash, fixed income and equities after interest rates peaked. If history is anything to go by, global equities will likely return more than 12% on average on dollar terms over the next 12 months if the Fed hike cycle has peaked.

With record $5.6 trillion cash on the side-lines, the equity market could be in for another leg higher as investors note the depressed valuations in various counters after the deep pullback. Faster-growing dividend-paying companies could be the biggest beneficiaries of the expected investment spree as they have been duly punished amid the Fed hike cycle.

Even as strategists at Capital Group remain bullish about the market outlook after the recent bounce back, analysts at Morgan Stanley are sceptical. Michael Wilson has warned against investing in US equities given the narrow market breadth and fading consumer and business confidence. Named one of the best portfolio strategists by an institutional investor survey, Wilson maintains that the prospects of a fourth-quarter rally have dropped significantly.

Wilson’s bearish sentiments are being fuelled by the expected negative impact of higher for longer interest rates. Falling earnings revision has only fueled scepticism about the overall market outlook.