European equity close: Italian shares surge to finish a strong week

European equity closing levels:

  • UK FTSE 100: +0.4%
  • German DAX: +0.1%
  • French CAC: +0.6%
  • Italy MIB: +0.9%
  • Spain IBEX: +0.9%
Weekly changes:
  • UK FTSE 100: +0.9%
  • German DAX: +2.3%
  • French CAC: +3.0%
  • Italy MIB: 3.4%
  • Spain IBEX: +0.7%

Italy’s FTSE MIB index retested the old highs late last week and followed that with gains in four of five days this week. It’s clear skies above:

European equity closing levels:

Biden still hasn’t made a decision on Fed chair but will soon

Powell and Brainard both spotted at White House yesterday

Earlier reports highlighted that Powell had been seen at the White House yesterday and that led some to conclude that he would be getting re-nominated. Now we learn that Brainard was also seen there so we have to wait and see.
The most likely scenario continues to be Powell renominated and Brainard gets promoted to the bank supervision head.
PredictIt has Powell well ahead:
Powell and Brainard both spotted at White House yesterday

US September non-farm payrolls +531K vs +425K expected

US non-farm payrolls employment data for October 2021

US non-farm payrolls employment data for October 2021
  • Prior was +194K (+312K)
  • Two month net revision +235K
  • Unemployment rate 4.6% vs 4.7% expected
  • Prior unemployment rate 4.7%
  • Participation rate 61.6% vs 61.7% expected (was 62.8% pre-pandemic)
  • Prior participation rate 61.7%
  • Underemployment rate 8.3% vs 8.5% prior
  • Average hourly earnings +0.4% m/m vs +0.4% expected
  • Average hourly earnings +4.9% y/y vs +4.8% expected
  • Average weekly hours 34.7 vs 34.8 expected
  • Change in private payrolls +604K vs +317K prior
  • Change in manufacturing payrolls +60K vs +26K prior
  • Long-term unemployed at 2.3m vs 2.7m prior
  • The employment-population ratio, at 58.8% vs 58.7% prior (61% before pandemic)
This is a good report for everyone. There’s some strength here but not enough to shake the Fed from its ‘transitory’ narrative.
The leisure and hospitality sector added 164K jobs, which is a solid sign of recovery from the delta wave.

US non-farm payrolls in focus today

NFP to round things off in trading this week

Amid all the focus on central banks over the past few days, one can easily forget that we still have one of the bigger data points that the Fed and the market tends to look at.
With that in mind, we may not get much notable action until the key risk event comes by but just be wary of the dollar gains yesterday as that has put emphasis on a couple of key technical levels among dollar pairs.
I’ll highlight them in a separate post later but be mindful that dollar bulls could stretch gains if they start to take a run at key levels on the charts. That is something to watch for in the run up and after the non-farm payrolls release, if we do get an upbeat report.

China’s state planner says coal inventory levels are back to normal

The National Development and Reform Commission of the People’s Republic of China (NDRC) is the state planner.

  • Says inventory of coal at China’s power plants has returned to normal levels.
  • Plants now have sufficient for 20 days supply.
Coal prices have plunged from their highs, assisted by official intervention (from the state planner and other authorities). China’s electricity producers were caught between high coal prices and limited ability to charge higher prices for power (China controls power prices). Power disruptions/shortages have hit industry and households.
I should note its always best to take official commentary (not only from China!) with a grain of salt.

NASDAQ up for the ninth consecutive day. Dow win streak snapped.

Sixth consecutive record close for the NASDAQ index. Dow string of four consecutive record closes is broken

The NASDAQ and S&P index are closing at record levels. The Dow industrial average closed lower and snapped it four consecutive record closing string string:

  • Dow industrial average string of four consecutive record closes is snapped (5 days up snapped too)
  • S&P rises for the six straight day
  • NASDAQ rises for the ninth straight day
  • NASDAQ recorded its sixth straight record close
  • The NASDAQ closed at a record level for the 42nd time
  • S&P index closed at a record level in 2021 for the 63rd time

The Russell 2000 index fell -0.08% after closing at a record level yesterday.

The final numbers are showing:
  • Dow fell -33.35 points or -0.09% at 36124.22
  • S&P index rose 19.49 points or 0.42% of 4680.07
  • NASDAQ index rose 128.73 points or 0.81% at 15940.32
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