The good news is bad news for North American markets.

North American equity markets dropped again as the strong labor market report showed that the US economy is resilient enough to weather higher interest rates. The central bank will likely continue its tightening program, hitting the valuation of both stocks and bonds. S&P 500 and Nasdaq lost 2.8% and 3.8%, and Canada’s S&P/TSX Composite declined 2.09%. 95% of the companies in the S&P 500 dropped. The decline happened after the best two-day run for stocks since the start of the pandemic.

 

September’s job report showed that US payrolls rose just 263,000, lowering the unemployment rate to 3.5, as the tight job market loosens. The 10-year treasury yields continued advancing for the 10^th consecutive week, and the US dollar climbed. The US dollar index, a weighted basket of other major world currencies, stands at 113, the level last seen around the 2000s.

 

The stronger US dollar will worsen the hit on many US companies’ earnings with the international sale as their bottom lines, and their balance sheets will show lower show smaller US dollar figures.

 

Oil advanced higher following the news of a 2 million barrel cut by OPEC+, bouncing over US98 a barrel for Brent.