The first week in November was volatile after the midterm elections. Equity, commodity and currency markets all whipsawed rapidly. Friday also marked the release of the October jobs report, which also contained a few surprises.
On Tuesday, the Democrats won back control of the House and the Senate for the first time since 2020. When all the races are called, the Democrats are expected to have a significant majority. Although progressives will have to contend with Trump’s veto power, it is likely that the midterm results will have a significant impact on monetary and other policies.
On Friday, the Bureau of Labor Statistics (BLS) jobs report found that the economy added 165,000 jobs in October. That was roughly 100,000 more than expected prior to the release. It is another sign that the labor are resilient. This caused gold prices to plummet as a stronger economy increases the odds of a rate hike in December.
In addition, Friday’s jobs report found that the unemployment rate had dipped to 4.1 percent while average hourly wages increased by 0.4 percent in October. The ADP released its version of the nonfarm payroll report on Wednesday and found that the economy added 86,000 jobs compared to an expected 64,000.
The JOLTS report came out Tuesday and found that there were 7.52 million job openings in the United States as of October. This was compared to an expected 7.15 million prior to the release. On Thursday, unemployment claims data for the last seven days was made available. During that period, there were 189,000 requests for benefits made compared to an expected 197,000.
The S&P 500 was down 2.33 percent this week to finish Friday’s session at 7,376. This represented a drop of 245 points since the open on Monday. Over the last five days, the market hit a high of 7,700 on Wednesday afternoon before reversing sharply and making a low of 7,363 by Thursday afternoon. The index is now down more than 4.5 percent over the last month.
The Dow was down 1.73 percent this week to finish at 51,285. This was a drop of more than 900 points for an index that is up just 0.8 percent for the month and up 9.32 percent over the last 12 months. For the week, the Dow surged on Wednesday to reach a high of 53,656 at the open of Thursday’s trade before reversing and making a low of 51,065 on Friday.
Finally, the Nasdaq was down more than 4 percent this week to close at 24,579 on Friday afternoon. The index is officially in correction territory after losing 1,045 points over the last five days and almost 10 percent over the last month. For the last 12 months, the Nasdaq is up 6.62 percent. For the week, the Nasdaq made a high of 26,011 on Wednesday and a low of 24,342 on Thursday.
In international news, Australia increased its key interest rate by 25 basis points to 4.85 percent on Monday night. Thursday morning, Great Britain also chose to increase its key interest rate by 25 basis points to 4 percent. On Friday, Canada announced that its economy lost 4,700 jobs in October and its unemployment rate increased to 6.7 percent.
Inflation data is set to be released on Tuesday while the Price Producers Index (PPI) for October comes out on Friday. Unemployment claim data comes out Thursday to close out the planned news release schedule for the week.