Federal Reserve hikes 75bps interest rate? Stocks Analysis After US jobs report

The S&P 500 went up sharply on Wednesday after Fed chair Jay Powell gave a strong hint that the central bank would slow its interest rate hikes later this month.

Before US jobs report, on Wednesday, November 30, at the Brookings Institute on economic outlook, the Federal Reserve’s Chair, Jerome Powell, implied the Fed will likely raise interest rates by another 0.5 percentage points, or 50 basis points.

The market has already absorbed 50 basis points of rate hikes because Federal Reserve officials decided earlier in November that the central bank should soon slow down the rate of interest rate increases to avoid overtightening. This showed that they were leaning toward a 50-basis-point increase in December.

“A substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate,” according to minutes from their Nov. 1-2 gathering released Wednesday in Washington.

And here on Thursday, December 2, US jobs numbers were hotter than expected, which added to the pressure on the Fed to maintain its tough stance on inflation. After the report, S&P slipped 1.2% because of fear of tightening.

Job growth was much better than expected in November despite the Federal Reserve’s aggressive efforts to slow the labor market and tackle inflation.

US Jobs Report

The US economy added more jobs in November than was anticipated, showing that there is still a high demand for new employees.

According to data issued by the Bureau of Labor Statistics, non-farm payrolls increased by 263,000 last month, down from the upwardly revised 284,000 increase in October and the 269,000 increase in September. According to the November report, the US economy has created an average of 392,000 jobs per month so far this year, down from 562,000 per month in 2021.

Despite these improvements, the unemployment rate remained constant at 3.7%.


Compare US Jobs Report and Previous Rate Hikes:

According to the Federal Reserve, interest rates increased by 75 basis points in the previous four months.

Source: Federal Reserve

According to the Bureau of Labor Statistics, the job data for November is the same as the previous four months except for July. This data suggests that the Fed will raise rates, as it has in the previous four months. Job growth was much better than expected in November, despite the Federal Reserve’s aggressive efforts to slow the labor market and tackle inflation.

source Nytimes


(SPX) S&P 500 Technical Analysis

On October 13, SPX made a new low of around $3500 and then again moved toward the upside, but as the 04 June resistance trend line indicates, the market structure is still in a downtrend. If we see the moving market as like a higher low and a lower low, and SPX breaks this trend line, then we see the bull rally; otherwise, the market again moves towards the new low, which is around the $3400 to $3300 area.

Us jobs market
source trading view

(BTC) Bitcoin Technical Analysis

On June 20 to August 29 bitcoin in an accumulation or sideways movement and strongly hold the $18,000 support range but after the FTX event BTC break the support and makes a new low of around $15,400, the market structure of bitcoin is heavy downtrend we wait for a couple of days if BTC resists the $18,000 range then we again see the new low.

bitcoin technical analysis

Wrapping Up

The market is anticipating the release of the US CPI number on December 13, which is expected to be 7.6% (the previous month was 7.8%), as well as the December 14 FOMC meeting, which will determine the market’s next move.

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