Fundamental Analysis

Stocks Fall And Bonds Rise After Jobs Readings: Markets Wrap

Stocks fell and bonds rose as traders weighed mixed readings on the labor market for clues on the Federal Reserve’s next steps.

Just 24 hours ahead of the highly anticipated US payrolls report, data showed US companies added the fewest jobs since the start of 2021. Meanwhile, the weekly jobless claims figures came below estimates.

This coming Friday, the August jobs report is expected to show payrolls in the world’s largest economy increased by about 165,000. While above the modest 114,000 gain in July, average payrolls growth over the most recent three months would ease to a little more than 150,000 — the smallest since the start of 2021.

“We could have another quiet day as investors wait to see tomorrow morning’ employment report,” said Matt Maley at Miller Tabak. “Given the impact last month’s employment report had on the markets, we wouldn’t blame investors at all for sitting on their hands for another day.”

S&P 500 futures lost 0.2%. Treasury 10-year yields declined two basis points to 3.74%.

Corporate Highlights:

  • Tesla Inc. plans to launch the advanced driver assistance system that it calls Full Self Driving technology in China and Europe in the first quarter of next year, pending regulatory approvals.
  • JetBlue Airways Corp. raised its sales forecast for the current quarter after the carrier said it benefited from re-booking passengers from rival airlines whose flights were disrupted by a technology outage in July.
  • As skepticism about the artificial intelligence trade mounts on Wall Street, bulls are looking to results from chipmaker Broadcom Inc. for a reset. The company is due to report after the close, and if it confirms that AI demand is still strong, it may help soothe investors’ nerves.
  • C3.ai Inc., a data analysis software company, reported quarterly subscription revenue that missed estimates.
  • Hewlett Packard Enterprise Co. reported weaker-than-expected margins, suggesting lower profitability than anticipated in its closely watched business of selling servers for artificial intelligence work.
  • Verizon Communications Inc. agreed to buy rival telecommunications operator Frontier Communications Parent Inc. for about $9.59 billion as the New York phone giant looks to expand its high-speed internet business.

Key events this week:

  • Eurozone GDP, Friday
  • US nonfarm payrolls, Friday
  • Fed’s John Williams speaks, Friday

Some of the main moves in markets:

Stocks

  • S&P 500 futures fell 0.1% as of 8:32 a.m. New York time
  • Nasdaq 100 futures fell 0.3%
  • Futures on the Dow Jones Industrial Average were little changed
  • The Stoxx Europe 600 fell 0.4%
  • The MSCI World Index was little changed

Currencies

  • The Bloomberg Dollar Spot Index fell 0.1%
  • The euro rose 0.3% to $1.1111
  • The British pound rose 0.2% to $1.3174
  • The Japanese yen rose 0.4% to 143.12 per dollar

Cryptocurrencies

  • Bitcoin fell 2.3% to $56,683.62
  • Ether fell 2.5% to $2,393.86

Bonds

  • The yield on 10-year Treasuries declined two basis points to 3.74%
  • Germany’s 10-year yield declined two basis points to 2.21%
  • Britain’s 10-year yield declined three basis points to 3.91%

Commodities

  • West Texas Intermediate crude rose 1.1% to $69.96 a barrel
  • Spot gold rose 0.9% to $2,519.25 an ounce

Source

Arvinth Akash

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