US Dollar Rebounds And Gold Retreats As Nonfarm Payrolls Beat The Street

US index futures are down 0.1%-0.3% this morning giving back some of yesterday’s US index gains, after today’s employment and inflation reports weakened the case for Fed rate cuts any time soon. The US 10-year treasury note yield has climbed from near 4.10% toward 4.25% on the news, boosting the US Dollar and knocking Gold down 0.7% in the last few minutes.   

US nonfarm payrolls came in better than expected (199K vs street 180K vs previous 150K). Average hourly earnings were steady over a year ago (4.0% in line and unchanged), but over a month ago earnings increased more than expected (0.4% vs street 0.3% and previous 0.2%), indicating that not only are wage inflation pressures not going away, they may be worsening.  

Overseas, Asia Pacific markets were mixed with Tokyo down 1.7%, Seoul up 1.0% and Hong Kong flat. Major European  bourses are green across the board with the Dax and FTSE both up about 0.2%. In commodity trading, Crude Oil is up 2.0% and Copper is up 0.7% in what may either be a delayed reaction to yesterday’s China trade data, or short covering ahead of the weekend.

Earnings reports last night from Broadcom* ($11.06 vs street $10.96) and Lululemon ($2.53 vs street $2.28) announced yesterday afternoon both exceeded expectations. Lululemon, however, is down 2.5% in premarket trading after the athletic clothing retailer lowered the high end of its sales guidance range even after noting it did really well on Black Friday.

*Shares of Broadcom are held in some portfolios managed by SIA Wealth Management.  

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