Global financial markets are still under pressure as global economies are starting to embrace stagflation, Chinese property bonds are still in disarray while U.S debt defaults creep in.
Asian shares erase earlier gains from Wall Street while Oil nears multi-year highs and U.S Treasury yields are nearing a four-month high ahead of the jobs report. The U.S non-farm payroll (NFP) report is a crucial economic indicator and will be released this Friday, the 8th of October 2021, at 14:30 SAST.
Here is what’s expected this week:
The U.S Non-Farm Payrolls (NFP)
The U.S labour market comes back into focus this week with the non-farm payroll (NFP) report set to deliver another upset in job numbers possibly. The U.S labour market has been a critical variable over the pandemic period to watch and see if the U.S economy is getting back on track.
The U.S non-farm payroll (NFP) report is intended to represent the total number of paid workers in the U.S. minus farm employees, government employees, private household employees, and employees of non-profit organizations.
The U.S Non-Farm jobs data for September is expected to increase to 480K new jobs from the prior months (Aug), upset at 243K.
The average hourly earnings (M/M) (Sep) data is expected to see a decrease to 0.4% from the 0.6% previous reading, while the average hourly earnings (Y/Y) (Sep) is likely to increase to 4.6%.
U.S. Unemployment Rate:
The U.S. Unemployment Rate (Sep) is widely expected to come in at 5.1% this Friday.
The unemployment rate measures the percentage of the total unemployed workforce and actively seeking employment during the previous month. The unemployment rate data point can be used as an indicator to see if an economic recovery is underway.
Key events to watch ahead of the U.S non-farm payroll (NFP) report:
- The U.S ADP Nonfarm Employment Change (Sep) – Today 14:15 SAST
- FOMC member Bostic - Today 15:00 SAST
- Crude Oil Inventories – Today 16:30 SAST
- S Initial Jobless Claims – Thursday 14:30 SAST
The Wall Street 30 Technical Analysis
Seasonal trends on the S&P 500 have been spot on during the year, and if true to its form, we should expect a market rebound by the second week of October. Whether this remains, an investment case for short-term dip buyers remains to be seen as a disappointing jobs report that could see markets spiral even lower.
For the bulls, we need to see the price action on the WS30 move higher from current levels and preferably close above the 34671-resistance level to negate the short-term downtrend. These movements in price should be supported by volume and price trading above its 50-day SMA.
The bears favour another leg lower this week, and a move from current levels to the 33765 supports could be on the cards. If the support level breaks, we could see more downward pressure to our 33370 level of interest.
- Volatility is expected to increase the closer we get to Friday's jobs report. The bears are still in control, driving prices higher.
- The 50-day SMA (blue line) is acting as resistance to the price action.
- The Relative Strength Index (RSI) is halfway and needs to push higher from here to support the extended outlook.
Chart Source: Wall Street 4H Timeframe - GT247 MT5 Trading Platform
Why is the jobs number important?
The Non-Farm Payrolls report (NFP) is treated as an economic indicator for people employed during the previous month, and the number being released will have a direct impact on the markets. In the United States, consumer spending accounts for most of the economic activity, and the Non-Farm Payrolls report represents 80% of the U.S. workforce. Farmers are excluded from the employment figures due to the seasonality of farm jobs.
Trading Term of the day:
Bull and Bear Markets
In the investing world, the terms "bull" and "bear" are frequently used to refer to market conditions. These terms describe how stock markets are doing in general—that is, whether they are appreciating or depreciating in value. A bull market is a market that is on the rise and where the economy is sound; while a bear market exists in an economy that is receding, where most stocks are declining in value. – Investopedia
When does the Non-Farm Payroll Announcement take place in South African time?
U.S Non-Farm Payrolls (NFP) report is live this Friday the 8th October 2021 at 14:30 SAST
Take note: The outlook and levels might change as this outlook is released during the current days (Wednesday the 6th of October 2021) U.S Market open.
Sources – MetaTrader5, Reuters, Investing.com.
Barry Dumas | Market Analyst at GT247.com
Barry has 12 years of experience in the financial markets. He enjoys educating clients on trading / investing and providing punchy technical analysis on securities. He currently holds a Wealth Management qualification and is studying towards becoming a Chartered Market Technician® (CMT) designation holder.
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