قالب وردپرس درنا توس
Home / Business / Stocks are slipping from record levels as a strong employment report jeopardizes interest rate cuts

Stocks are slipping from record levels as a strong employment report jeopardizes interest rate cuts



US. Equities fell at the start of Friday's trading session, as the government's monthly payroll report estimated that the economy created more than 224,000 jobs in June, which reduced the likelihood of a US Federal Reserve cut in July.

The major US stock indices closed a public holiday cut on Wednesday for the first time in 17 months, at a record high.

United States. The markets were closed on Thursday for Independence Day.

What are the benchmarks?

The Dow Jones Industrial Average

DJIA, -0.66%

gave 1

06 points or 0.4% at 26,856 points on the S & P 500 Index

SPX, -0.77%

dropped 14 points or 0.5% to 2,982, while the Nasdaq Composite Index

COMP, -0.81%

lost 45 points or 0.5% at 8,127 points.

On Wednesday, the Dow rose 179.32 points or 0.7% at 26,966 points, the first record since October 3, while the S & P 500 Index

SPX, -0.77%

recorded its third record in a row, rising 22.81 points, or 0.8%, to 2,995.82. The Nasdaq Composite Index

COMP, -0.81%

ended the day at an all-time high of 8,170.23, adding 61.14 points or 0.8%, according to Dow Jones Market Data for the first time since January 26, 2018 again on the same day.

What drives the market?

According to a MarketWatch survey, the US economy created 224,000 new jobs in June, more than 170,000 expected, while the unemployment rate rose slightly from 3.6% to 3.7%.

After a Weak Reading of 75,000 Jobs Wall Street, which was founded in May, expected the number of new jobs to increase again in June. This number may call into question the strong belief in the futures markets that the Federal Reserve will lower interest rates at its next meeting from July 30 to 31.

Prior to publishing vacancies, Wall Street priced in prices based on CME Group data An almost certain interest rate cut, with the market a 25% chance of a 50 basis point cut in Fed rates over the typical 25 basis points at the end of this month. After the release, the likelihood of a 50 basis point drop to 8% fell.

"I do not see any change in the Fed, which they will do based on a job report," said JJ Kinahan, chief strategist at TD Ameritrade MarketWatch. "The market says that the likelihood of a rate cut is 100%. The Fed has been cornered because expectations are so high. However, Kinahan added that the overall strength of the labor market, as evidenced by the Friday report, could cause the Fed to lower interest rates only once and then postpone the timing of the next cut to make it feel better to get the pace of the economic downturn in the US. Earlier this week, markets recovered in the news that President Trump and Chinese President Xi Jinping had agreed to resume trade negotiations and Chinese purchasing of US agricultural products, while the US pledged not to introduce new tariffs and US Technology company to allow the sale of some goods The Chinese telecommunications giant Huawei Technologies Inc.

However, information is missing on the exact nature of the compensation. There are reports that American negotiators will travel to Beijing next week for the ultimate deal. Beijing has not announced details on the timing and extent of agricultural sales, while Chinese Trade Ministry spokesman Gao Feng said on Thursday that agreement could only be reached if the US agrees to cancel all tariffs, which is the American position I have "less confidence than before that a trade agreement will be reached, because unlike earlier this year, the endless US presidential election season has begun," said Christopher Wood, global head of equity strategy for Jeffries, in a statement Thursday message to the customers.

"This means that Trump must defend any agreement with Beijing against [Democratic] criticism. It also remains that the Fed's lukewarm language has recently allowed Trump's Hardline to trade.

How are other markets acting?

The yield on 10-year US government bonds

TMUBMUSD10Y, + 5.46%

The note rose 8 basis points to 2.031%.

In action overnight, Hong Kong's Hang Seng Index scored

HSI, -0.07%

finished the business with a minus of less than 0.1% just in negative territory, while the Chinese Shanghai Composite Index

SHCOMP, + 0.19%

rose 0.2% and the CSI 300 Index

000300, + 0.52%

increased by 0.5%.

The European shares gave way with the Stoxx Europe 600

SXXP -0.72%

lost 0.7%.

Meanwhile gold prices

GCN19, -1.94%

were 0.3% lower after posting the highest level in six years on Tuesday.

The US dollar

DXY, + 0.64%

rose 0.3%, as measured by the ICE US Dollar Index, while US oil prices rose

US: CLM9

dropped 1.4%.


Source link