The July jobs report issued Friday delivered mixed takeaways for the market, although it confirmed an overall healthy U.S. labor market.
On one hand, the pace of nonfarm payrolls growth fell short of forecasts in July, with 187,000 jobs gained compared to the expected 200,000. On the other hand, the jobless rate fell to 3.5%, exceeding expectations of 3.6%. Wages increased at a monthly pace of 0.4% and an annual rate of 4.4%, which was faster than expected.
The market interpreted the jobs report in a dovish manner, lowering expectations for potential interest rate hikes in September. Market-derived probabilities put the chance of a 25-basis-point hike in September at 13%, down from 19% before the report was issued Friday morning.
President Joe Biden applauded the job market data, emphasizing that the share of working-age Americans with jobs has reached a 20-year high. He attributes this positive trend to the effects of his economic policies, often referred to as “Bidenomics.”
Atlanta Fed President Raphael Bostic said the Fed is likely to remain into restrictive territory well into 2024 and said he is unsurprised wages remain strong.
Five stocks from the Russell 1000 index (large-cap) and five exchange-traded funds had substantial price action in the opening minutes of trading Friday as a result of jobs data and the movement in interest rates, as well as statements regarding quarterly corporate results.
5 Stocks Rallying On Friday
- Atlassian Corp. (NASDAQ:TEAM) surged by an impressive 19% as the company massively surpassed Street’s estimates in the last quarter, prompting Barclays to raise its price target from $165 to $195.
- Natera Inc. (NYSE:NTRA) soared 16% after delivering better-than-expected results in the second quarter.
- Universal Display Corp. (NASDAQ:OLED) rose 11% following its stronger-than-expected earnings and revenues, with both Needham and Deutsche Bank raising their price targets.
- Cloudflare, Inc. (NASDAQ:NET) experienced a 10% rally after it reported stronger-than-anticipated earnings, leading Needham to increase the price target from $75 to $85.
- Amazon Inc. (NASDAQ:AMZN) gained nearly 10%, achieving its strongest daily performance since November 2022 due to a surprise EPS and revenue beat in the last quarter.
5 ETFs Rallying On Friday
- The Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY) saw a notable 2.2% increase in stocks within the consumer discretionary sector, largely driven by a surge in the ETF’s heavyweight, Amazon.
- VanEck Junior Gold Miners ETF (NYSE:GDXJ) experienced a boost of 1.8% in response to rising gold prices that were fueled by a declining dollar.
- iShares MSCI Mexico ETF (NYSE:EWW) surged 1.7%, aided by a 1% increase in the value of the Mexican peso.
- First Trust DJ Internet Index Fund (NYSE:FDN) rose 1.2%, led by Amazon, Cloudflare and Atlassian.
- iShares JP Morgan USD Emerging Market Bond ETF (NYSE:EMB) recorded an impressive 1% gain, marking its best daily performance of the week. A lower U.S. dollar and declining Treasury yields contributed to the strength of emerging market bonds.
Produced in association with Benzinga