Last Updated 4:05 PM EST
Stock indices finished today’s trading session in the red after today’s stronger-than-expected ADP nonfarm employment change report. The Nasdaq 100 (NDX), the S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) fell 0.75%, 0.79%, and 1.07%, respectively. The energy sector (XLE) was the session’s laggard, as it lost 2.2%. Conversely, the technology sector (XLK) was the session’s leader, though it still fell 0.27%.
Furthermore, the U.S. 10-Year Treasury yield increased to 4.04%, an increase of more than 10 basis points. Similarly, the Two-Year Treasury yield also increased, as it hovers around 5%.
The Atlanta Federal Reserve updated its latest GDPNow reading, which allows it to estimate GDP growth in real-time. The “nowcast” becomes more accurate as more economic data is released throughout the quarter. Currently, it estimates that the economy will expand by about 2.1% in the second quarter.
This is higher than its previous estimate of 1.9%, which can be attributed to recent releases from the U.S. Census Bureau and the Institute for Supply Management.
Last updated: 1:00PM EST
Equity markets are in the red so far in today’s trading session as investors digest a fresh set of economic data. On Thursday, the Institute for Supply Management released its monthly report for the ISM Non-Manufacturing Purchasing Managers’ Index, which measures the overall economic condition of the non-manufacturing sector.
A number over 50 represents an expansion, whereas anything below 50 signals a contraction. The report came in at 53.9, higher than the expected 51 and higher than last month’s reading of 50.3.
It’s worth noting that this indicator has been in an overall downtrend since peaking in December 2021, when it hit a high of 69.1. If this trend continues, it might not take long before the non-manufacturing sector enters into a period of sustained contraction.
Furthermore, the ISM Non-Manufacturing Employment report came in at 53.1, which beat expectations of 49.9.
Last updated: 10:30AM EST
The market’s downward momentum continues to gain steam after an hour of trading, as the Bureau of Labor Statistics released its JOLTs Job Openings report, which helps measure job vacancies in the U.S. The number came in at 9.824 million job openings for May, below the expected 9.935 million.
This is lower than the previous report, which saw 10.103 million job openings. Furthermore, job openings have been in an overall decline since peaking at 11.855 million back in May 2022’s report. It’s important to remember that this data is for May, thus, making it a lagging indicator.
Last updated: 9:30AM EST
Stocks opened lower on Thursday morning after a round of economic data. The Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are down 0.97%, 0.89%, and 0.93%, respectively, at 9:30 a.m. EST, July 6.
The ADP labor market data indicated that this market continued to be strong as companies created far more jobs than expected. Private sector jobs soared by 497,000 in June, exceeding the 267,000 jobs added in May and ahead of economists’ estimate of 220,000 jobs. This was the biggest monthly rise in jobs since July of last year.
While the leisure and hospitality sector added the most jobs with 232,000 new hires, the construction sector added 97,000 jobs, while trade, transportation, and utilities added 90,000 jobs. However, annual pay went up at a slower rate to 6.4% as inflationary pressures refuse to abate.
Meanwhile, the U.S. trade deficit data for the month of May narrowed by 7.3% to $69 billion, in line with economists’ forecasts. While imports fell by 2.3% to $316.1 billion in May, exports dropped by 0.8% to $247.1 billion.
Mortgage data for the week ending July 1 indicated that mortgage rates are also on an upswing, with the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increasing to 6.85% from 6.75%. The rising mortgage rates have affected mortgage applications that fell by 4.4% last week.
First published: 4:24AM EST
U.S. Futures are down on Thursday morning, following the minutes of the FOMC’s latest policy meeting. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are down 0.55%, 0.46%, and 0.45%, respectively, at 4:00 a.m., EST, July 6. The shortened trading week is ending negatively, with the three averages in the red so far.
Stock Indices tumbled yesterday after hearing remarks that the Federal Reserve is aiming to raise rates in the future when this was already declared by Fed Chair Powell in his speech back in June. A majority of Fed officials believe at least two more rate hikes are required, albeit not that aggressively, which means we could be looking at 25 basis point hikes in the future.
On the brighter side, the Fed believes that the U.S. could avoid a recession this year as long as the labor market remains strong and consumer spending remains resilient. The Fed’s stance will be driven by economic data points.
Important data sets scheduled this week include the Weekly Initial Jobless Claims, the S&P Global Services PMI index, and ADP Employment figures due today, while Payrolls data is due tomorrow. Meanwhile, American clothing company Levi Strauss (NYSE:LEVI) is scheduled to report Q2FY23 earnings today after the market closes.
U.S. Stocks Making News
Turning towards individual stocks, low-cost carrier JetBlue Airways (NASDAQ:JBLU) announced that it has decided to unwind its Northeast Alliance (NEA) with American Airlines (NASDAQ:AAL) after a court ruling ordered them to terminate the deal, citing its anti-competitive nature. Instead, JBLU will now focus on its pending $3.8 billion acquisition of ultra-low-cost carrier Spirit Airlines (NYSE:SAVE). Further, Meta Platforms (NASDAQ:META) launched a microblogging app called Threads yesterday. Threads is Instagram’s text-based social messaging app and is a direct threat to Twitter, which is already facing an exodus of users.
Also, biotechnology company Moderna (NASDAQ:MRNA) signed a deal to research, develop, and manufacture its messenger RNA (mRNA) medicines in China “exclusively for the Chinese people” and vowed that those would not “be exported”. Moreover, Bank of America (NYSE:BAC) joined the list of banks that have announced plans to increase dividend payouts following the successful completion of the Federal Reserve’s annual Stress Test.
Elsewhere, European indices are trading in the red on Thursday, following negative sentiment from global economies. Oil prices continue to hover above the $71 mark as Saudi Arabia and Russia meet to discuss the latest cuts in oil production.
Asia-Pacific Markets End Lower on Thursday
Asia-Pacific indices tumbled following the minutes of the Fed’s June meeting. Additionally, Goldman Sachs (NYSE:GS) downgraded Hong Kong-listed Chinese banks, citing issues such as huge government debt and weak earnings expectations, pushing down shares of major banks.
Hong Kong’s Hang Seng slumped by 3.02%, while China’s Shanghai Composite and Shenzhen Component indexes ended lower by 0.54% and 0.55%, respectively.
Similarly, Japan’s Nikkei and Topix indices finished the trading session down by 1.70% and 1.26%, respectively.
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