Dow Jones Forecast: DJIA rises after solid NFP report

US futures

Dow future 0.15% at 44,845

S&P futures 0.01% at 6084

Nasdaq futures 0.14% at 21457

In Europe

FTSE -0.07% at 8344

Dax 0.19% at 20399

US NFP rose 227k vs 36k
Unemployment is 4.2%, up from 4.1%
December rate cut is still expected
Oil falls across the week despite OPEC+ extending output cuts

NFP beats with 227k jobs added

U.S. stocks are set for a stronger open after the US non-farm payroll report supported the case for a December rate cut while supporting the view that the labour market remains resilient.

According to the non-farm payroll report, 227,000 jobs were added in November, up from just 36,000 in October, when the headline figure was skewed by hurricane strikes. This was above expectations of 200,000, highlighting ongoing resilience in the US jobs market.

Meanwhile, the unemployment rate ticked higher, to 4.2%, up from 4.1%, in line with forecasts, and average hourly earnings were slightly hotter than expected, at 0.4%, in line with October but ahead of the 0.3% figure forecast.

The data comes as the market continues to weigh up Federal Reserve rate cut expectations as solid job creation is offset by rising unemployment. Given the market reaction of rising stocks, falling treasury yields, and a weaker USD, the market considers the data support a December rate cut. Following the data the market is pricing in a 72% chance of the Fed cutting interest rates by 25 basis points in the December meeting.

While the November NFP report continues to support the Goldilocks scenario of solid job creation without the prospect of inflation pushing much higher, a few more reports like this, with slightly hotter-than-expected average hourly earnings, could see the market reining Fed rate cut expectations for 2025 further.

Corporate news

Lulelemon Athletica is set to open 9% higher after increasing its full-year forecast amid resilient demand for its athletic wear in the US during the holiday shopping season and continued strength internationally.

DocuSign is up over 10% after the electronic signature company lifted its 2025 revenue forecast following strong Q3 earnings.

Ulta Beauty jumped 11% after the cosmetic retailer lifted its annual profit forecasts, pointing to revived demand for perfumes and makeup in the holiday season.

Dow Jones forecast – technical analysis.

Dow Jones continues to trade within a rising channel, but is hovering around the all-time high just below 45000. Buyers will look to rise above 45k to fresh all-time highs towards 46k. On the downside, 44.5k is a key level, with a break below here negating the near-term uptrend. A break below 43k creates a lower low.

FX markets – USD falls, EUR/USD rises

The USD is falling after the non-farm payroll report. The report comes ahead of inflation data next wek and the FOMC rate decision on December 18.

EUR/USD is modestly lower and is set to end the week approximately where it started. The market is taking the collapse of the French government in its stride. Eurozone GDP Q3 was in line with earlier readings at 0.4% QoQ.

GBP/USD is rising and is on track to gains across the week, its second straight weekly gain. The pound is supported by expectations the BoE will cut rates at a slower pace following the Labour Budget which is considered inflationary. The UK economic calendar is quiet today.

Oil falls across the week despite OPEC+ extending output cuts

Oil prices are heading lower and are on track for weekly decline despite OPEC+ extending output cuts well into next year.

The OPEC+ group pushed back the start of its oil production increases until April and extended the full unwinding of cuts by year until the end of 2026. The group had been planning on unwinding cuts from October this year. However, concerns over supply surplus and weak Chinese growth have left the group little option but to postpone.

Still, the move was widely expected, which explains in part the lack of a reaction .Instead, ongoing concerns over supply shortages next year are keeping prices weighed down.

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