Stock Market Today: Stocks Swing Wildly After October Jobs Data

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The latest jobs report sent markets on a wild ride Friday.

Early this morning, the October jobs report showed that nonfarm payrolls rose by 261,000 last month, well above economists' consensus estimate for 193,000. On the plus side, this marked a sharp decline from the 315,000 jobs added in September. Additionally, the unemployment rate edged up to 3.7% from September's 3.5%.

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"The initial reading is indicating that the U.S. economy has been quite resilient in the face of the multiple rate hikes by the Fed," says Ziad Gergi, senior fund manager at Hargreaves Lansdown. "In addition, the interesting reading was on the [month-over-month] average hourly earnings that came slightly above expectation at +0.4% (versus 0.3%) indicating a continued wage inflation."

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Brad McMillan, chief investment officer for Commonwealth Financial Network, gave "two cheers" to this jobs report. There was "enough growth to keep the economy, and earnings, going, but enough slowing that the Fed and markets can plausibly see a pause sometime in the next six months or so," McMillan says. "This isn't a perfect Goldilocks report, not too hot and not too cold, but it is as close as we were going to get."

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And Wall Street eventually agreed. Stocks initially sailed higher after the report, only to swing into negative territory by lunchtime. However, a late-day burst of buying power had the tech-heavy Nasdaq Composite closing up 1.3% at 10,475, while the broader S&P 500 Index (+1.4% at 3,770) and the blue-chip Dow Jones Industrial Average (+1.3% at 32,403) also ended the day higher. It was the first win of the week for all three indexes.

What's In Store for Markets Next Week?

A busy earnings calendar, for one, with results from Walt Disney (DIS), Beyond Meat (BYND) and Bumble (BMBL) among the reports on tap. The results of Tuesday's midterm elections will certainly be in focus, too. However, the big event will likely be Thursday morning's release of the October consumer price index. In September, consumer price inflation showed no signs of slowing down – and many on Wall Street aren't expecting that to change this time around.

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"We estimate that inflationary pressures remained robust, with core once again supported by very strong shelter inflation and idiosyncratic factors providing headwinds," says Barclays economist Jonathan Hill. "We forecast price growth across food, energy, and core services." The economist adds that declining used car prices will help offset some of those headwinds.

We've discussed many times in this space ways in which investors can position their portfolios to protect against high inflation. These include taking positions in firms found within "inflation-resistant" sectors, i.e., those providing goods and services that people will buy no matter what, like consumer staples and healthcare. Another option is to target the best dividend stocks. As for investors looking to optimize the income portion of their equity income holdings, look no farther than the top high-paying dividend stocks. Not all these names are created equal, but the 10 stocks featured here all have solid fundamentals and boast dividend yields of at least 5%.

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With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.