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Wall St ended Friday’s session on a high, with the key indices each adding over 1% and the Dow Jones jumping 2.1% as investors welcomed a mixed payrolls report with an unexpected rise in unemployment and a slowdown in annual wage growth, all signs that the Federal Reserve’s aggressive rate hike action is taking effect on cooling economic growth in the US. In May, the US economy added 339,000 jobs in a sign that the booming labour market in the US remains strong, however unemployment increased to 3.7% from 3.4% which was one of the fastest increases in unemployment since early in the pandemic. Some of the increase in unemployment could be driven by mass layoffs in the technology sector that have seen over 200,000 workers lose their jobs this year across the big and smaller tech names.
Over in Europe, markets closed higher on Friday as investors responded to US lawmakers passing a bill to raise the US debt ceiling and cap government spending for 2-years, just days before the potential default deadline date. The STOXX600 rose 1.5% led by mining, oil and gas stocks all rallying. Germany’s DAX rose 1.25% on Friday, the French CAC added 1.87% and, in the UK, the FTSE100 rose 1.56%.
OPEC+, a group of global oil producers, met in Vienna on Sunday to discuss output policy to stabilise oil prices which have been battered down in recent times by weakened demand out of China. At the meeting on Sunday, OPEC+ reached an agreement to extend output cuts announced in April this year of 1 million barrels per day into 2024 amid price instability of recent times and the potential for excess supply.
On the local index, Friday’s trading session ended the week on a positive note as the ASX closed 0.48% higher on the last trading session of the week, buoyed by a sharp rally for materials stocks on a rise in the price of iron ore. Consumer staples and health care stocks were the sectors that underperformed the local market on Friday.
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