JSE up on Goldilocks US jobs data

The JSE closed firmer on Friday, while global markets were mixed as investors considered a US jobs report pointing to a strong labour market.

The nonfarm payrolls (NFP) report showed the world’s biggest economy added 275,000 jobs in February, more than the 198,000 the market expected. However, the unemployment rate rose to 3.9%, higher than the expected 3.7%. Wage growth, a metric that Federal Reserve policymakers watch closely for signs of cooling inflation, was slower than expected.

The data comes a day after Fed chair Jerome Powell said the central bank was “not far” from delivering cuts to interest rates. However, policymakers needed to see additional data confirming inflation was cooling.

In his testimony to the Senate’s banking committee on Thursday, Powell said if conditions continued as expected, including a strong job market and cooling inflation, cuts could still come in 2024. However, Powell cautioned that cutting rates too early could risk a reacceleration of inflation.

“Despite the jobs market remaining strong, today’s data is quite positive, and supports the ‘soft landing’ narrative the Fed was looking for,” SPI Asset Management partner Stephen Innes said.

“Powell made it clear policymakers need to see signs of a cooling economy before cutting interest rates. Today’s [NFP] numbers could provide a bit of breathing room. They show the job market and the economy are still growing but not so much that they raise pressure on inflation,” said Innes.

The JSE all share gained 0.15% to 73,717 points, with the major indices mixed, while the top 40 added 0.23%.

For the week, the all share was 1.29% firmer, pushed higher by gains in precious metals and miners, resources and industrial metals and miners, up 12.15%, 8.34% and 5.38%, respectively.

At 5.40pm, the Dow Jones industrial average was 0.22% firmer at 38,877 points. European markets were mixed.

The rand remained steady below R19/$ for most of the week.

“The rand appreciated against the dollar this week supported by rising gold prices and domestic GDP figures that indicated SA narrowly avoided a technical recession,” Citadel Global director Bianca Botes said.

At 5.34pm, the rand was little changed at R18.6875/$, having touched an intraday best of R18.5663/$ — the best level in a month. It had weakened 0.15% to R20.4782/€ and 0.7% to R24.0729/£. The euro was unchanged at $1.0951.

Gold gained 0.63% to $2,173.02/oz, while platinum lost 0.21% to $913.62/oz. Brent crude was 1.27% weaker at $82.31 a barrel.