September Payrolls Surge
U.S. equity gains dwindled last week, recovering from mid-week declines following Friday’s solid September payrolls report. The S&P 500 and Nasdaq Composite both edged out their fourth straight weekly gain. The strength in the labor market provided increased confidence for a soft landing while at the same time essentially extinguished hopes of a larger 0.50% Fed rate cut in November. A rate cut of 0.25% is now widely expected. Geopolitical risks in the Middle East continue to serve as the largest overhang to financial markets. Chinese stocks continued to rally following Beijing’s recent fiscal stimulus move, albeit trimming gains toward the end of the week.
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