The United States announced that the June employment data far exceeded expectations, strengthening the possibility of the Federal Reserve (Fed) raising interest rates by 3 yards (75 basis points) at the July monetary policy meeting, causing market concerns. US stocks opened lower on Friday (8th). Treasury yields inverted.
Before the deadline, the Dow Jones Industrial Average fell more than 60 points or nearly 0.20%, the Nasdaq Composite fell nearly 90 points or nearly 0.8%, the S&P 500 fell nearly 0.5%, and the Philadelphia Semiconductor Index fell more than 1%.
The number of new non-farm payrolls in the United States in June was 372,000, far exceeding market expectations of 268,000, and the previous value was slightly lowered from 390,000 to 384,000; the US unemployment rate in June was 3.60%, in line with expectations and the same as the previous value; the United States The labor force participation rate in June was 62.20%, 0.1 and 0.2 percentage points lower than the previous and expected values, respectively.
A solid jobs report could reinforce the view that the Fed will raise rates by another 3 yards later this month. Previously, Fed Governor Waller (Christopher Waller) and St. Louis Fed President Bullard (James Bullard) yesterday both expressed support for raising interest rates by 3 yards.
Atlanta Fed President Raphael Bostic said on Friday that he “fully” supports the Fed’s decision to raise interest rates by three yards at its July monetary policy meeting, stressing that the move would not cause long-term damage to the economy.
A rise in U.S. Treasury yields after the data weighed on stocks, especially growth stocks. The U.S. 10-year Treasury yield rose again above the 3% mark, and was at 3.052% at the time of writing. U.S. 2-year Treasury yields, which are more sensitive to short-term interest rate expectations, rose sharply to 3.0923 percent, inverting with the 10-year U.S. Treasury note.
In other news, shockwaves from the assassination of former Japanese Prime Minister Shinzo Abe swept across markets. Asian stocks retreated, while the safe-haven yen strengthened. Ahead of the shooting, China’s planned 1.5 trillion yuan ($220 billion) stimulus package, mainly for infrastructure, boosted sentiment.
In terms of individual stock news, according to June data released by the China Passenger Car Association (CPCA) today, Tesla (TSLA-US) delivered 78,906 vehicles in China in June, a record high and an increase from 33,155 vehicles in the same period last year. 138%. Among them, 968 were exported and 77,938 were sold domestically.
In energy news, the United States continued its diplomatic efforts to try to hit the price of Russian crude exports. U.S. Treasury Secretary Janet Yellen will reportedly travel to Asia to persuade China and India not to undermine Western plans to cap Russian crude prices. After Western countries imposed sanctions, both China and India increased Russian oil imports. In addition, US President Joe Biden will also visit Saudi Arabia in the middle of this month.
As of 21:00 on Friday (8th) Taipei time:
Stocks in focus:
GameStop (GME-US) fell 6.41% to $126.46 a share in early trade
Meme stock GameStop fired its chief financial officer Mike Recupero, who will be replaced by current chief accounting officer Diana Saadeh-Jajeh. Meanwhile, the company’s chief executive, Matt Furlong, said the company would go through another round of massive layoffs in an effort to help the company operate more “flexibly”.
Twitter (TWTR-US) fell 4.23% to $37.15 a share in early trade
Musk’s $44 billion deal to buy Twitter may be in jeopardy, according to the Washington Post, and people in Musk’s camp have stopped participating in some funding discussions in the deal, including the Oracle founder, according to multiple sources. Larry Ellison, venture capital firm Andreessen Horowitz, Fidelity, cryptocurrency exchange Binance, and more, they have invested billions of dollars.
People familiar with the matter said that Musk’s team believes that Twitter’s data on spam accounts is unreliable, even though Twitter emphasized at a recent meeting that it deletes nearly a million bot accounts every day and shares data with Musk.
Wedbush Securities said the original offer may have been “excluded”. Analyst Dan Ives lowered his price target on Twitter to $43, citing a roughly 60% chance of a renegotiation.
Levi Strauss (LEVI-US) rose 3.6% to $17 a share in early trade
Levi Strauss reported last-quarter earnings before the market opened, with revenue and profit above Wall Street expectations, while raising its cash dividend for the quarter and maintaining its previous full-year forecast. According to the financial report, Levi Strauss reported revenue of $1.47 billion last quarter, and adjusted earnings per share of $0.29, which were both better than market estimates of $1.43 billion and $0.23.
Today’s key economic data:
- U.S. non-farm payrolls reported 372,000 in June, compared with an expected 268,000, and the previous value was lowered to 384,000 from 390,000
- The U.S. unemployment rate in June was 3.6%, expected to be 3.6%, and the previous value of 3.6%
- The U.S. average weekly workweek in June was 5.1 hours, compared with 34.6 hours previously
- U.S. average hourly earnings rose 5.1% in June, 5% expected and 5.2% previously
- U.S. average hourly wage growth in June was 0.3%, expected 0.3%, the previous value of 0.3%
- The U.S. labor force participation rate in June reported 62.2%, expected 62.4%, and the previous value of 62.3%
- The final value of US wholesale inventories in May was 1.8%, expected 2%, and the previous value was 2.3%
- The monthly growth rate of US wholesale sales in May was 0.5%, expected 0.9%, and the previous value was 0.8%
Wall Street Analysis:
Ipek Ozkardeskaya, senior analyst at UBS, said that as recession talk came into focus and investors were increasingly focused on employment data, a strong jobs report would allow the Fed to fight inflation more aggressively.
Jonathan Golub, chief U.S. equity strategist at Credit Suisse in New York, said: “It’s very, very difficult to go into a recession when there are a lot of job openings. In fact, the most important thing in a recession is the collapse of the labor market and the spike in unemployment. And Right now, we don’t see any signs of looking decent at all.”
