Wall Street is adding more than 2% and there are good signs for the week ahead

Wall Street ended the last session of the week higher, with the three major indexes adding more than 2% to their highs in mid-December.

The Dow Jones Industrial Average rose 2.13% to 33,630.61 points, while the S&P 500 added 2.28%, to 3,895.08 points. The Nasdaq Composite Technology Index rose 2.56% 10569.29 points.

Data from the US labor market helped the positive sentiment. The market greeted the new employment and unemployment figures with enthusiasm, but it was the average hourly wage in December that boosted investor sentiment.

Average hourly earnings increased 0.3% in December, on a streak. On an annual basis, it increased by 4.6%, slowing compared to 5.1% in November and less than the estimate of economists – which indicated 5% -, revealed data released by the US Department of Labor on Friday.

Moreover, in the same period, 223,000 jobs were created, 20,000 more than economists’ forecasts. The entertainment, hospitality, healthcare and construction sectors created the most jobs.

The unemployment rate fell to 3.5%, which is equivalent to 5.7 million unemployed in December, down from the 3.7% recorded in November. The number of long-term unemployed, meaning without work for 27 weeks or more, fell by 146,000 to 1.1 million.

In a rare show of normalcy, the good news on the economic front released on Friday regarding employment resulted in a rally in North American indices. Although the number of new jobs created beat expectations, indicating a job market the market is also hot to help with. Fighting inflation, the fact is that labor costs did not rise at the expected pace, coupled with the fact that there was a downward adjustment to these costs compared to November,” explains Marco Silva, advisor at ActivTrades, in a written comment sent to Negócios.

That is, from a practical point of view, it was ideal news for investors, as the component that affects inflation has reduced its intensity, while the strength of the labor market, with the unemployment rate falling to 3.5%, gives encouraging signs about the ability of the largest economy in the world to escape from a growing recession. Marco Silva adds.

However, the ActivTrades advisor advises caution, because, in fact, “these data are rather mixed, because the increase in jobs, the decrease in unemployment and the decrease in the participation rate is something that naturally increases the pressure on wages, which has not happened.”

Therefore, “the numbers known today, although they aroused optimism, should be welcomed with caution, as you need another two to three months at the same pace to have confidence in this reality, which, if it happens, will be” gold on blue “to the market”.

In any case, “in the next few days the sentiment may remain positive, at least until the consumer price index is known, which will be a nine-point evidence of inflationary behavior in the last month of 2022,” Marco Silva predicts.

Help today also absorb the latest comments from members of the North American Federal Reserve (Fed). Atlanta Fed President Rafael Bostick believes the central bank “still has a lot of work to do to rein in inflation.”

St. Louis Federal Reserve Chairman James Bullard defended that the interest rate is approaching constraining terrain and that inflation expectations are already beginning to ease, giving investors some optimism.

Among the major market movements, Tesla managed to catch up with its peers and reverse the negative trend at the beginning of the sessiondriven by a second reduction in auto prices in China in three months, It managed to finish the day adding 2.47%.