The US employment report validated expectations of robust jobs growth
United States
US stock indices advanced thanks to the strong employment report but energy companies and banks limited the overall gains. Analysts think that this report all but ensured that the Federal Reserve will increase its fed funds rate on March 15. The Dow Jones industrials were up 0.2 percent, the S&P gained 0.3 percent and the Nasdaq added 0.4 percent. However, for the week, the three indices retreated 0.5 percent, 0.4 percent and 0.2 percent respectively.
February employment was up 235,000 after an upwardly revised gain of 238,000 in January. The unemployment rate slipped to 4.7 percent from 4.8 percent the month before. Private payrolls added 227,000 jobs after 221,000 in January.
Technology companies climbed thanks in part to gains for chipmakers including Applied Materials, Broadcom and Texas Instruments. General Electric climbed to lead industrial companies higher. Cummins and Rockwell Automation also gained. Ulta climbed after it reported a bigger profit and stronger sales than expected. Estee Lauder gained as well. Zumiez declined after the company said its sales declined in February and its forecasts for the first quarter came up short of estimates.
AT&T and Staples gained. Hospital operators declined a day after the Republican plan backed by Trump to overhaul Obamacare cleared its first hurdles in Congress. While passage of the bill remains uncertain, some analysts believe the bill will go through. Tenet Healthcare retreated. Finisar was lower after the network equipment maker gave disappointing revenue and profit forecasts for the current quarter.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$3.90 to US$1,202.65. Copper futures were up 0.6 percent to US$2.60. WTI spot crude was down 79 US cents to US$48.49. Dated Brent spot crude was down 82 US cents to US$51.37. The US dollar was down against the yen, euro, Swiss franc and the Australian dollar. The currency was unchanged against the pound. The Dollar Index was down 0.6 percent. The yield on US Treasury 30 year bond was down 2 basis points to 3.16 percent while the yield on the 10 year note was down 3 basis points to 2.57 percent.
Europe
Most indices advanced within a narrow range. The markets pared early gains following the release of the stronger than expected US employment report for February. The data has further cemented the belief among investors that the Federal Reserve will likely raise interest rates at their meeting March 15. The FTSE and SMI were up 0.4 percent while the CAC added 0.2 percent. The DAX slipped 0.1 percent. For the week, the FTSE lost 0.4 percent and the DAX was down 0.5 percent. Both the CAC and SMI were virtually unchanged — the former was down 1.81 points and the latter lost 0.09 point.
Economic data from the Eurozone was mixed at the end of the trading week. German merchandise trade data beat expectations, while industrial output data from France and the UK disappointed. Rising bond yields helped lift banking stocks again while energy stocks climbed after crude oil prices rebounded from three-month lows hit overnight.
Volkswagen advanced after the automaker entered into a long-term partnership agreement with Tata Motors. Wirecard climbed after the company said that it has successfully completed the acquisition of the business of Citi Prepaid Card Services. Fraport gained after the owner and operator of Germany’s Frankfurt Airport reported that FRA welcomed more than four million passengers in the month of February, 1 percent higher than last year.
William Hill rose after the company said it has appointed Philip Bowcock as CEO with immediate effect, ending a nine-month-long search for a permanent CEO. BT Group advanced after agreeing to legally split its infrastructure unit. Repsol increased in Madrid after the company announced that it has made the largest US onshore conventional hydrocarbons discovery in 30 years in Alaska.
Germany’s January merchandise trade surplus was €18.5 billion. Exports were up 2.7 percent on the month after retreating 3.8 percent in December. Imports advanced 3.0 percent after edging up 0.1 percent the month before. French January industrial production declined 0.3 percent but was up 1.0 percent on the year. UK output was down 0.4 percent and manufacturing production retreated 0.9 percent in January. However, from a year ago, the former was up 3.2 percent and the latter was 2.7 percent higher. The UK visible trade deficit remained broadly unchanged in January at £10.83 billion after a £10.91 billion shortfall in December.
Asia Pacific
Most Asian stocks advanced Friday as oil prices rebounded from three-month lows and the European Central Bank upgraded its growth and inflation forecasts for the euro area and signaled little urgency to ease policy again in the light of improving economic outlook. The US dollar hit six-week highs against the Japanese yen as investors expect that the Federal Reserve will raise interest rates at its March 14 and 15 meeting. The US employment report was released after markets here closed for the week.
The Shanghai Composite eased 0.1 percent while the Hang Seng added 0.3 percent. On the week, the Shanghai Composite was down 0.2 percent while the Hang Seng edged up 0.1 percent.
The Nikkei rallied 1.5 percent and the Topix jumped 1.2 percent as the yen’s weakness lifted exporters and financials gained ground amid a global bond selloff after the ECB signaled a diminishing urgency for more policy action. On the week The Nikkei and Topix were up 0.7 percent and 1.0 percent respectively. Canon, Honda, Panasonic, Toyota, Toshiba, Mazda and Sony advanced as the yen touched 115 per dollar. Financials Mizuho Financial, Mitsubishi UFJ Financial, Sumitomo Mitsui Financial, Daiwa Securities and Nomura Holdings also rallied.
The S&P/ASX climbed 0.6 percent and the All Ordinaries was 0.5 percent higher as banking stocks benefited from rising US bond yields on talk of higher interest rates. Banks ANZ, Commonwealth and NAB closed higher. Biotech firm CSL rallied after the Republican plan backed by US President Donald Trump to overhaul the U.S. healthcare system cleared its first hurdles in Congress Thursday. Woodside Petroleum and Santos climbed even though crude prices fell through the $50 a barrel support level overnight. Miners including BHP Billiton, Fortescue Metals Group and Rio Tinto continued to retreat.
The Kospi was up 0.3 percent and 0.9 percent on the week after the Constitutional Court ruled to uphold the impeachment of the country’s president, Park Geun-hye, helping remove political uncertainty. The Sensex added 0.1 percent and 0.4 percent on the week. Investors waited for the state election results due out on Saturday to see whether the BJP will emerge victorious in Uttar Pradesh, which sends the highest number of representatives to the Upper House.
Looking Forward

March 15

United States

Federal Reserve Monetary Policy Announcement

Federal Reserve Chair Press Conference

March 16

UK

Bank of England Monetary Policy Announcement

Japan

Bank of Japan Monetary Policy Announcement

Switzerland

Swiss National Bank Monetary Policy Assessment

The following indicators will be released this week…

Europe

March 13

Italy

Industrial Production (January)

March 14

Eurozone

Industrial Production (January)

Germany

ZEW Survey (March)

March 15

UK

Labour Market Report (February)

March 16

Eurozone

Harmonized Index of Consumer Prices (January final)

March 17

Eurozone

Merchandise Trade (January)

Asia Pacific

March 13

Japan

Machinery Orders (January)

Producer Price Index (February)

March 14

China

Industrial Production (January, February)

Retail Sales (January, February)

March 16

Australia

Labour Force Survey (February)

New Zealand

Gross Domestic Product (Q4.2017)

Americas

March 14

United States

Producer Price Index (February)

March 15

United States

Retail Sales (February)

Consumer Price Index (February)

Empire State Survey (March)

March 15

United States

Initial Unemployment Claims (week ending prior Saturday)

Housing Starts (February)

Philadelphia Fed Survey (March)

March 17

Canada

Manufacturing Sales (January)

Industrial Production (February)

Consumer Sentiment (March preliminary)

Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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