Strong payrolls and wage figures have hobbled the stock rally as the final session winds down in London, but have given the dollar a boost.
Payrolls report puts the fight back in the dollar
“Up until lunchtime, this week had been about a weakening dollar and a steady shift by the Fed away from the hawkishness of much of 2022. But today’s job and wage numbers have given the greenback a lift, while sending stocks into retreat in the US. Gains have been trimmed in Europe, but it is the US where the losses have been felt. This was not the report investors had been hoping for it seems, since it suggests that inflation, and with it the Fed’s push to raise rates, is nowhere near done yet.”
Early December weakness not too concerning
“It is too early to write off hopes of a bounce in December however. Traditionally, the real gains don’t come until the second half of the month, which leaves room for some consolidation in stocks to digest the gains made this week. After such a tough year, it might seem foolish to hope for a bounce, but the year-end rally remains a reliable feature most of the time, even if what happens beyond 31 December is a return to 2022’s selling.”
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