SPX-"NFP: a disappointing surprise that worries the markets"
Throughout the day, markets oscillated between positive and negative territory. Eventually, the major indexes all closed lower, with the $DJIA(.DJI)$ posting the biggest loss of 0.6%. The $S&P 500(.SPX)$ fell 0.3%, while the $NASDAQ(.IXIC)$ lost 0.1%.
The Dow ended the week down nearly 2%, while the S&P 500 and Nasdaq both fell about 1%.
MAIN EVENTS
Labor market - ADP - NFP
The labor market is finally cooling down. Finally, maybe. The US economy added 209,000 jobs in June, below Wall Street estimates of around 225,000 jobs. This is the first time in 15 months that the employment figure has fallen below forecasts. For inflation watchers, this is real progress.
United States Non Farm Payrolls
US NFP
Traders were expecting worse, especially after yesterday's report from ADP said the private sector added 497,000 jobs in June.
The difference between the two reports would probably be due to the seasonal adjustment methodology...
The addition of 209,000 jobs is far from negligible. The labor market is still hotter than cold — June jobs data remains well above baselines for a tight labor market — and that strengthens the case for Fed officials to raise rates again in July.
On Friday, the probability of the Fed raising rates in July was 94.9%, according to the CME tool FedWatch.
Note that average hourly wages also increased by 0.4% compared to the previous month, more than the increase of 0.3% in May.
MARKET SCENARIO
The post-pandemic economic recovery continues, but with signs of slowing. Despite the addition of 209,000 jobs in June, the numbers remain below expectations, suggesting that the economy may face short-term challenges...
The good news is that analysts seem to be moderating their downgrades. Over the past three months, analysts have cut their earnings estimates for the quarter by just 3%, according to FactSet.
This is better than the five- and ten-year average revision of -3.4%.
It's a small step worth taking...
Would you like to play the game "tails I win, tails you lose"?
FactSet
Friday's second-quarter results from major banks mark the start of the new earnings season.
SPX LEVELS
Key levels: 4400
Upper zone: 4425-4450-4475-4500 (major resistance)
Bottom zone: 4375-4360-4300 (major support)
SPX- Levels
NEXT WEEK
The latest inflation figures in China (Monday) and especially in the United States (Wednesday).
German ZEW Index (Tuesday), Bank of Canada Rate Decision (Wednesday) and US Consumer Confidence Index (Friday).
PepsiCo, UnitedHealth and several major US banks $JPMorgan Chase(JPM)$ will kick off earnings season late next week.
Thank you for reading and supporting.
@TigerStars @CaptainTiger @TigerPM
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