US job creation falters for a second month

Heading into the close the FTSE is 30 points higher, but US markets are floundering in the wake of poor job figures. 

People at a jobs fair
Source: Bloomberg

A second successive dire jobs report from the US has caused the FTSE to give back some of its gains from the morning, while US markets have turned red once again. The US economy added only 142,000 jobs in September, only a small improvement over August’s 136,000, which itself was revised sharply lower.

Those expecting a Fed move this year suffered a reverse as hourly earnings failed to grow at all during the month. Initially, markets dropped sharply, and while US markets are still down, the FTSE has clawed its way off the lows, led by the mining sector.

Gold and silver received a major boost this afternoon, as these havens came into favour as expectations of a 2015 rate hike were revised  lower. It looks unlikely that Janet Yellen will be able to push the button this year, but short of a new programme of QE, it is difficult to see how such inaction will be good for stock markets.

It is Mark Carney’s turn next week, as the Bank of England steps into the spotlight, and we may even see a vote by one policymaker to cut rates, given the spreading malaise in the global economy.

Earnings season also begins in the US, as Alcoa publishes figures. Unfortunately for stock market bulls, these are unlikely to offer much sustenance, given that they are likely to feature both complaints about a stronger US dollar and concerns about the outlook for trading in coming quarters.

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