Job growth slowed sharply last month, a sign the U.S. economy is cooling this fall after a torrid summer. Employers added 150,000 jobs in October, half the prior month’s gain and the smallest monthly increase since June, the Labor Department said Friday. The unemployment rate rose to 3.9%, up a half-point since April, and wage growth slowed. The figures are likely to bring the Federal Reserve’s historic interest-rate increases to an end by providing stronger evidence that higher borrowing costs have slowed the economy. The report could also mollify concerns that brisk consumer spending this summer would lead hiring or wages to reaccelerate. Fed officials raised rates at the most rapid pace in decades and to a 22-year high in July to bring inflation under control. They have held rates steady since then, including at their meeting this week, as price pressures eased.
Investors in interest-rate futures markets reduced their bets that the Fed would raise interest rates again, with the probability of one more hike falling to around 16% Friday from 26% on Thursday, according to CME Group. Investors also began to anticipate the Fed would make its first rate cut in May instead of June. Even before the weaker-than-anticipated report, Fed Chair Jerome Powell on Wednesday suggested a slowdown in wage growth meant the labor market might not be as hot as prior hiring figures had suggested.

The Swiss stock market closed slightly down on Friday after the SMI had recently gained for four trading days in a row, losing 0.1 per cent to 10,580 points and thus finishing just above its low for the day. Of the 20 SMI stocks, there were 11 price gainers and 9 price losers. A total of 17.06 (previously: 20.41) million shares were traded. Swiss Re exceeded market expectations with its results for the third quarter. According to Citigroup, net profit was 17 per cent above estimates. Swiss Re's combined ratio was likewise 50 basis points better than anticipated. Swiss Re is also sticking to its full-year profit target of more than 3 billion dollars. The share nevertheless lost 1.1 per cent. Participants cited profit-taking among reinsurers as the reason for this. Munich Re and Hannover Re declined as well. The shares of Kuehne + Nagel dropped by 2.8 per cent, partly due to Moeller-Maersk's financial results, which were better, however the outlook had a negative impact.

The European stock markets closed mixed on Friday, as investors analysed the consequences of last month's slowdown in US job creations. The Stoxx Europe 600 index gained 0.2% to 444.2 points. In Paris, the CAC 40 and SBF 120 were down by 0.2% and 0.1% respectively. The DAX 40 in Frankfurt rose by 0.3%, while the FTSE 100 shed 0.4%. Oil stocks fell in the wake of oil prices. TotalEnergies slipped 3.5%, CGG lost 2.4% and Technip Energies 2.2%. In London, Shell tumbled by 4.2% while BP slumped by 1.8%. ALD declined by 3.1%. The Société Générale subsidiary specialising in long-term vehicle financing published what it described as "mixed" results for the third quarter, including a 28.9% fall in net profit. Accor (-3.3%) lost ground after a rating from Barclays. Insurer Axa (-1.2%) confirmed all its targets after posting a slight increase in sales for the first nine months of 2023. Chemicals manufacturer Solvay (-3.1%) indicated that it was targeting the lower end of its guidance range for gross operating profit (Ebitda) in 2023, as its volumes slowed in the third quarter in a sluggish macroeconomic environment. Danish shipping giant A.P. Moeller-Maersk (down 16.9% in Copenhagen) announced that it was cutting more than 10,000 jobs in order to reduce costs, as the sector faces sluggish demand, falling freight prices and inflationary pressures. Car manufacturer BMW (+2% in Frankfurt) confirmed its forecasts for the 2023 financial year despite a 7.7% reduction in net profit for the third quarter.

The S&P 500 rallied Friday, capping its best weekly performance since November 2022, after the latest monthly jobs report suggested the Federal Reserve’s interest-rate raising campaign is working. The broad index gained 0.9%, bringing its gains for the week to 5.9%. The index is up 14% this year. The Dow Jones Industrial Average added about 200 points, or 0.7%, on Friday, while the Nasdaq Composite rose 1.4%. Apple shares dropped 0.5% after the company reported its fourth consecutive quarter of falling revenue and warned that sales in the current quarter would be similar to last year. The company’s business in China shrank, underscoring weakness from a broad economic slowdown in the country and new competition from rival Huawei Technologies. Shares of Paramount rallied 15% after the company, parent of Paramount Pictures movie studio and the CBS broadcast network, said its streaming business lost less money last quarter. Shares of Block rose 11% after the payments company formerly known as Square raised its full-year guidance and beat expectations for the third quarter. All but one of 11 sectors in the S&P 500 rose Friday. The energy sector slipped 1% as Brent crude dropped 2.3% to $84.89 a barrel. Financial software company Bill Holdings (-25.2%) has revised its annual forecasts downwards, pointing out that inflation and the fall in consumer sentiment are weakening its business customers, particularly SMEs.

In Asia, major indexes broadly closed with gains on Monday, following the firm lead of Wall Street on Friday. The markets were led by the stock exchange in South Korea, where the Kospi rose by 4.1 per cent. The rally in Seoul was driven by a temporary ban on short selling. In Tokyo, the Nikkei-225 climbed by 2.3 per cent. The Chinese stock exchanges recorded gains as well. The HSI in Hong Kong increases by 1.7 per cent, the Shanghai Composite by only 0.9 per cent.

Treasury yields broadly fell on Friday, leaving rates with back-to-back weekly declines, after the October non-farm payrolls report produced a lower-than-expected 150,000 new jobs. The 10-year Treasury note yield plunged by 10 basis points to 4.574%, after already falling by 26 basis points over the last two sessions. The 2-year Treasury note yield fell by 13 basis points to 4.841%.

DZ raises target Swiss Re to CHF 96 (94) - Hold
Target price Adecco: Royal Bank of Canada upgrades to CHF 45 (43) - Outperform
Baader lowers Ems-Chemie to CHF 547 (613) - Reduce

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