Market Update
U.S. Stocks, Oil, Yields Ease, Record Trade Surplus In China
Barry Adams
08 Aug, 2022
New York City
Stocks on Wall Street rested on Monday in light trading after popular indexes advanced for the third week in a row.
Investors looked ahead to the inflation report after the July payroll increased more-than-expected 528,000.
Investors are increasingly factoring a larger rate hike of at least 75 basis points at the Fed Reserve's next policy meeting in September.
The S&P 500 index was nearly unchanged at 4,142.75 and the Nasdaq Composite index gained 0.07% or 8.43 to 12,644.46.
Semiconductor stocks were under pressure on the demand worries after NVIDIA said revenues from the sale of chips for gaming devices dropped sharply.
Futures of crude oil increased $1.0 to $89.98 and natural gas 42 cents to $7.64 a thermal unit.
Crude oil futures rose after a fire at Cuba's central fuel storage engulfed a third large tank on Monday.
On Friday, a lightning strike set off a fire at the fuel storage terminal located at the port of the industrial city of Matanzas, about 50 miles east of Havana.
The yield on 10-year Treasury notes eased to 2.768% and on the 2-year notes declined to 3.24%.
Berkshire Hathaway Inc increased 0.3% to $293.16 after the insurance and industrial conglomerate swung to a second quarter loss of 43.8 billion from a profit of $28.1 billion a year ago.
The GAAP accounting includes the quarterly loss of $53.0 billion in investment security investments.
Operating earnings in the second quarter increased to $9.3 billion from $6.7 billion a year ago.
Berkshire spent $1.0 billion to acquire its shares and increased the total to $4.2 billion in the first-half of 2022.
Insurance float, the net liabilities assumed by the company under insurance contracts, was relatively unchanged from the end of 2021 to approximately $147 billion.
Barrick Gold gained 4.5% to $16.37 after the mining company reported better-than-expected earnings on higher copper production.
Nvidia fell 7.5% to $175.66 after the advanced chipmaker reported second quarter revenues of $6.70 billion, below the company estimate of $8.10 billion.
The revenue shortfall was driven by a decline in gaming products after the end of Covid-19 pandemic driven boom and the rising macro headwinds.
Bed Bath & Beyond soared 37.8% to $11.22 and AMC Entertainment surged 15.1% to $25.53 on no company news.
Both stocks were driven higher after investors expressed optimism on popular chat boards and social media posts.
Palantir Technologies Inc declined 12.1% to $10.08 after the technology contractor for the federal government reported a wider quarterly loss.
Revenues in the second quarter increased 26% to $473 million and a net loss of $179 million or 9 cents a diluted share from $138.5 million or 7 cents a diluted share.
For the third quarter, the company guided revenues between $474 million and $475 million and adjusted income from operations between $54 million and $55 million.
European Markets Close Higher, Swiss Jobless Rate Held Steady
European markets traded higher following the market advances in the U.S. and Asia.
Investors overlooked the simmering tensions between the U.S. and China and shifted focus to regional economic news and corporate earnings.
China extended its military exercises in waters around Taiwan and stepped up cyberattacks against the island.
The eurozone investor confidence improved marginally in August according to a closely watched survey released by the think tank Sentix on Monday.
The investor confidence index rose to -25.2 in August from -26.4 in July but was lower than estimated by some analysts at -24.8 and the elevated energy prices and soaring inflation are keeping the optimism in check.
The unadjusted employment rate in Switzerland held steady at 2.0% in July on a monthly basis but fell from 2.8% rate a year ago, according to the data released by the State Secretariat for Economic Affairs or SECO on Monday.
Seasonally adjusted jobless rate was unchanged at 2.2% in July from the previous month.
The DAX index increased 0.8% to 13,687.69, the CAC-40 advanced 0.80% to 6,524.45, and the FTSE 100 index gained 0.6% to 7,482.37.
BioNTech SE declined 10.5% to $163.95 after the German biotech company reported weaker-than-expected quarterly results.
The Covid-19 vaccine maker and a development partner with Pfizer said its latest vaccine to treat the latest virus variants is expected to benefit fourth quarter results.
Siemens Energy gained 1.03% to 16.37 euros after the power equipment maker reported a wider quarterly loss.
Joules Group Plc gained 33.5% to 44 pence after the company said it is in discussion with the rival fashion house Next Plc for the sale of a strategic sale.
Next Plc increased 0.5% to 6,478.85 pence.
Veolia Environnement SA after the French water utility confirmed the sale of Suez's U.K. waste operations to Australia-based Macquarie Group for around 2.4 billion euros.
Pagegroup Plc declined 6.1% 424.13 pence after the recruiting group highlighted the weakening market for job placement.
Asian Markets Advance, China's Exports and Trade Surplus Soar
Asian stocks closed mixed and the indexes in Hong Kong fell on the worries that the higher rates in the U.S. will further depress valuation of future earnings stream of tech companies.
Tokyo stocks advanced on a positive domestic corporate outlook.
Suzuki Motor soared 10% after the company reiterated its annual outlook.
Canon Inc surged 4.6% to 3,370 yen after the camera and office equipment maker announced its second stock repurchase program this year.
Bandai Namco Holdings increased 4.06% to 10,020 yen after the video game maker reported a 55% jump in video game sales in the quarter ending in June.
SoftBank Group increased 0.7% to 5,695.0 yen and the company reported a loss of more than $23 billion in the quarter ending in June reflecting the decline in tech stocks around the world following the increase in interest rates.
China's trade surplus soared in July above $100 billion for the first-time after exports surged 18% but imports rose only 2.3% from a year ago on the sluggish demand for energy and raw materials.
The Nikkei 225 index gained 0.3% to 28,24924, the Hang Seng index fell 0.8% to 20,045.77, and the Sensex index gained 0.8% to 58,853.07.
Stocks in India advanced as investors shifted to focus on domestic earnings and weakening crude oil prices.
The Indian rupee held firm and closed at 79.51 against the U.S. dollar.
Berkshire Operating Income Surges 37%
Scott Peters
08 Aug, 2022
New York City
Berkshire Hathaway Inc increased 0.3% to $293.16 after the insurance and industrial conglomerate swung to a second quarter loss of 43.8 billion from a profit of $28.1 billion a year ago.
The GAAP accounting includes the quarterly loss of $53.0 billion in investment security investments.
Operating earnings in the second quarter increased to $9.3 billion from $6.7 billion a year ago.
Berkshire spent $1.0 billion to acquire its shares and increased the total to $4.2 billion in the first-half of 2022.
Insurance float, the net liabilities assumed by the company under insurance contracts, was relatively unchanged from the end of 2021 to approximately $147 billion.
Movers: AMC Ent, Barrick Gold, Berkshire Hathaway, Bed Bath & Beyond, BioNtech, NVIDIA, Palantir
Barry Adams
08 Aug, 2022
New York City
Investors looked ahead to the inflation report after the July payroll increased more-than-expected 528,000.
Investors are increasingly factoring a larger rate hike of at least 75 basis points at the Fed Reserve's next policy meeting in September.
The S&P 500 index was nearly unchanged at 4,144.73 and the Nasdaq Composite index gained 0.07% or 8.43 to 12,665.73.
Futures of crude oil increased $1.0 to $89.98 and natural gas 42 cents to $7.64 a thermal unit.
The yield on 10-year Treasury notes eased to 2.768% and on the 2-year notes declined to 3.24%.
Barrick Gold gained 4.5% to $16.37 after the mining company reported better-than-expected earnings on higher copper production.
Revenues in the second quarter declined 1% to $2.8 billion and net income rose 19% to $488 million from $411 million a year ago.
Diluted earnings per share rose to 27 cents from 23 cents a year ago.
Gold production in the quarter was nearly unchanged at 1.04 million ounces and copper production rose 25% to 120 million pounds from a year ago.
Bed Bath & Beyond soared 37.8% to $11.22 and AMC Entertainment surged 15.1% to $25.53 on no company news.
Both stocks were driven higher after investors expressed optimism on popular chat boards and social media posts.
Berkshire Hathaway Inc increased 0.3% to $293.16 after the insurance and industrial conglomerate swung to a second quarter loss of 43.8 billion from a profit of $28.1 billion a year ago.
The GAAP accounting includes the quarterly loss of $53.0 billion in investment security investments.
Operating earnings in the second quarter increased to $9.3 billion from $6.7 billion a year ago.
Berkshire spent $1.0 billion to acquire its shares and increased the total to $4.2 billion in the first-half of 2022.
Insurance float, the net liabilities assumed by the company under insurance contracts, was relatively unchanged from the end of 2021 to approximately $147 billion.
BioNTech SE declined 10.5% to $163.95 after the German biotech company reported weaker-than-expected quarterly results.
The Covid-19 vaccine maker and a development partner with Pfizer said its latest vaccine to treat the latest virus variants is expected to benefit fourth quarter results.
NVIDIA Corp fell 7.5% to $175.66 after the advanced chipmaker reported second quarter revenues of $6.70 billion, below the company estimate of $8.10 billion.
Total revenues rose 3% from a year ago and fell 19% from the previous quarter after gaming revenues plunged 33% from a yar ago and dropped 44% from the previous quarter to $2.04 billion.
Gross margin in the second quarter declined to 43.7% from 64.8% a year ago.
The revenue shortfall was driven by a decline in gaming products after the end of Covid-19 pandemic driven boom and the rising macro headwinds.
Palantir Technologies Inc declined 12.1% to $10.08 after the technology contractor for the federal government reported a wider quarterly loss.
Revenues in the second quarter increased 26% to $473 million and a net loss of $179 million or 9 cents a diluted share from $138.5 million or 7 cents a diluted share.
For the third quarter, the company guided revenues between $474 million and $475 million and adjusted income from operations between $54 million and $55 million.
Stocks On Wall Street Rest Ahead of Inflation Report
Barry Adams
08 Aug, 2022
New York City
Investors looked ahead to the inflation report after the July payroll increased more-than-expected 528,000.
Investors are increasingly factoring a larger rate hike of at least 75 basis points at the Fed Reserve's next policy meeting in September.
The Consumer Price Index data for July are scheduled to be released on August 10.
The inflation index increased 9.1% in June on an annual basis and 1.3% from the previous month on the sustained increase in food and energy prices.
The S&P 500 index was nearly unchanged at 4,144.73 and the Nasdaq Composite index gained 0.07% or 8.43 to 12,665.73.
Futures of crude oil increased $1.0 to $89.98 and natural gas 42 cents to $7.64 a thermal unit.
The yield on 10-year Treasury notes eased to 2.768% and on the 2-year notes declined to 3.24%.
Barrick Gold gained 4.5% to $16.37 after the mining company reported better-than-expected earnings on higher copper production.
Nvidia fell 7.5% to $175.66 after the advanced chipmaker reported second quarter revenues of $6.70 billion, below the company estimate of $8.10 billion.
The revenue shortfall was driven by a decline in gaming products after the end of Covid-19 pandemic driven boom and the rising macro headwinds.
Bed Bath & Beyond soared 37.8% to $11.22 and AMC Entertainment surged 15.1% to $25.53 on no company news.
Both stocks were driven higher after investors expressed optimism on popular chat boards and social media posts.
Palantir Technologies Inc declined 12.1% to $10.08 after the technology contractor for the federal government reported a wider quarterly loss.
Revenues in the second quarter increased 26% to $473 million and a net loss of $179 million or 9 cents a diluted share from $138.5 million or 7 cents a diluted share.
For the third quarter, the company guided revenues between $474 million and $475 million and adjusted income from operations between $54 million and $55 million.
BioNTech SE declined 10.5% to $163.95 after the German biotech company reported weaker-than-expected quarterly results.
The Covid-19 vaccine maker and a development partner with Pfizer said its latest vaccine to treat the latest virus variants is expected to benefit fourth quarter results.
European Markets Close Higher, Swiss Jobless Rate Held Steady
Bridgette Randall
08 Aug, 2022
Frankfurt
European markets traded higher following the market advances in the U.S. and Asia.
Investors overlooked the simmering tensions between the U.S. and China and shifted focus to regional economic news and corporate earnings.
The eurozone investor confidence improved marginally in August according to a closely watched survey released by the think tank Sentix on Monday.
The investor confidence index rose to -25.2 in August from -26.4 in July but was lower than estimated by some analysts at -24.8 and the elevated energy prices and soaring inflation are keeping the optimism in check.
The unadjusted employment rate in Switzerland held steady at 2.0% in July on a monthly basis but fell from 2.8% rate a year ago, according to the data released by the State Secretariat for Economic Affairs or SECO on Monday.
Seasonally adjusted jobless rate was unchanged at 2.2% in July from the previous month.
The DAX index increased 0.9% to 13,691.37, the CAC-40 advanced 0.95% to 6,533.65, and the FTSE 100 index gained 0.6% to 7,487.37.
Siemens Energy gained 1.03% to 16.37 euros after the power equipment maker reported a wider quarterly loss.
Joules Group Plc gained 33.5% to 44 pence after the company said it is in discussion with the rival fashion house Next Plc for the sale of a strategic sale.
Next Plc increased 0.5% to 6,478.85 pence.
Veolia Environnement SA after the French water utility confirmed the sale of Suez's U.K. waste operations to Australia-based Macquarie Group for around 2.4 billion euros.
Pagegroup Plc declined 6.1% 424.13 pence after the recruiting group highlighted the weakening market for job placement.
China's July Exports Rise 18%, Record Trade Surplus
Brian Turner
08 Aug, 2022
New York City
China's exports in July rose 18%, measured in the U.S. dollars, to $333 billion following a 17.9% increase in June, according to the data released by China Customs on Sunday.
China's yuan has depreciated about 6% against the U.S. dollar sofar in the year.
Trade surplus in the month surged to $101.3 billion, a surge of 75% from a year ago when exports reached $56.6 billion.
July trade surplus for the first time crossed $100 billion and surpassed the previous record set in June.
However, imports gained only 2.3% indicating weak rebound in the local demand for commodities and minerals.
China's export sector employs about 180 million people and account for about 0.9 percentage points of GDP growth in the first-half of 2022.
Asian Markets Advance, U.S.-China Tensions Simmer
Arjun Pandit
08 Aug, 2022
New York City
Asian stocks closed mixed and the indexes in Hong Kong fell on the worries that the higher rates in the U.S. will further depress valuation of future earnings stream of tech companies.
China continued its military exercises around Taiwan waters expressing its disapproval of the recent visit of the U.S. House Speaker Nancy Pelosi.
Tokyo stocks advanced on a positive domestic corporate outlook.
Suzuki Motor soared 10% after the company reiterated its annual outlook.
Canon Inc surged 4.6% to 3,370 yen after the camera and office equipment maker announced its second stock repurchase program this year.
Bandai Namco Holdings increased 4.06% to 10,020 yen after the video game maker reported a 55% jump in video game sales in the quarter ending in June.
China's trade surplus soared in July above $100 billion for the first-time after exports surged 18% but imports rose only 2.3% from a year ago on the sluggish demand for energy and raw materials.
The Nikkei 225 index gained 0.3% to 28,24924, the Hang Seng index fell 0.8% to 20,045.77, and the Sensex index gained 0.8% to 58,853.07.
Stocks in India advanced as investors shifted to focus on domestic earnings and weakening crude oil prices.
The Indian rupee held firm and closed at 79.51 against the U.S. dollar.
Adani Ports and Special Economic Zone Ltd declined 0.4% to 807.0 rupees after the company reported weak growth in revenues.
Total revenues in the June quarter rose marginally to 5,099.25 crore rupees from 5,073 crore rupees a year ago.
Profit-after-tax increased 16.9% to 1,091.56 crore rupees and the port operator handled record quarterly cargo of 91 million tons.
The company also reiterated its previous estimate of the annual cargo between 350 million and 360 million tons and operating earnings between 12,200 crore rupees and 12,600 crore rupees.
Bharti Airtel gained 0.2% to 704.95 rupees and the telecom operator said June quarter net income surged nearly five-fold.
U.S. and Global Markets Turn Cautious On Rate Hike Worries
Barry Adams
05 Aug, 2022
New York City
Stocks on Wall Street traded lower after a stronger-than-expected jobs report shifted the focus to the next rate hike size.
The U.S. labor market continued to expand for the nineteenth month in a row and has now regained the 22.0 million jobs lost during the first two months of pandemic in March and April 2020.
July payrolls increased 528,000 following the 372,000 additions in June, the nineteenth monthly increase in a row, the Bureau of Labor Statistics said Friday.
The unemployment rate declined to 3.5% from 3.6% in June and dropped to a five-decade low.
Both the non-farm employment and jobless rates have returned to their February 2020 pre-pandemic level.
The sharp accelerations in payroll additions surprised many economists who were looking for an increase of less than 265,000 according to an informal survey of six economists conducted by Ticker.com.
Investors worried that the larger-than-expected payrolls gains despite the slowing economic backdrop may support the Federal Reserve's case for raising rates at a faster pace at its next meeting.
The latest labor market data will certainly encourage the policymakers to lift rates by as much as 75 basis points at its next two-day meeting ending on September 21.
The yield on 10-year U.S. Treasury notes shot up to 2.82% and 2-year notes jumped to 3.23%.
The S&P 500 index fell 0.1% to 4,145.19 and the Nasdaq Composite declined 0.5% to 12,657.56.
For the week, the S&P 500 index gained 0.4% and the Nasdaq Composite added 2.1%.
Futures of crude oil fell 12 cents to $88.42 and natural gas declined 13 cents to $7.98 a thermal unit.
For the week, the West Texas Intermediate crude fell 9.7% and the Brent crude dropped 13.7%.
Carvana Co soared 40% to $46.98 after the online used-car retailer reported a rise in sales volume.
Online vehicle sales rose 9% to 117,564 from 105,185 and revenues increased 16% to $3.9 billion a year ago.
Carvana swung to a quarterly loss of $439 million from a profit of $45 million a year ago.
Total gross profit per vehicle declined to $3,368, a decrease of $1,752
Expedia Group closed up 0.3% to 102.52 and the online travel booking platform operator reported stronger-than-expected revenues and earnings in its latest quarterly report.
Gross bookings soared 26% to $26.1 billion as travel demand further improved on higher demand for lodging, air and other products.
Bookings for hotels soared 57% from a year ago and 8% higher than in the second quarter of 2019, the previous peak.
Second quarter revenues increased 51% to $3.2 billion and net loss shrank to $185 million from $301 million a year ago.
DoorDash decreased 0.8% to $80.29 after the delivery company reported revenues in the second quarter increased 30% to $1.6 billion and total orders rose 23% to 426 million.
Net loss surged to $263 million from $102 million a year ago
Lyft Inc soared 16.6% to $20.28 after the ride-hailing company reported second quarter revenues jumped 30% from a year agon and 19% from the previous month to $990.7 million.
Net loss in the quarter rose to $377.2 million from $251.9 million a year ago.
Active riders in the second quarter increased 15.9% to 19,8 million and revenue per active rider jumped 11.8% to $49.89.
Cautious European Markets Digest Positive Earnings
European markets traded sideways before and after the release of the keenly awaited July labor market survey in the U.S.
Investors were cautious on the simmering tensions between the U.S. and China.
China escalated its largest-ever military exercises near Taiwan and fired several missiles over the island nation.
At least five missiles landed as far as the southernmost islands of Okinawa, Japan.
China's foreign ministry placed sanctions on the U.S. House Speaker Nancy Pelosi and her immediate family members.
The U.S. added 528,000 payrolls in July after adding 372,000 in June, the U.S. Bureau of Labor Statistics reported Friday.
The sharply higher payroll additions were broad based and highlighted the strength in the labor market despite the economic slowdown but also raised the fears of larger interest rate hike at the next Fed's meeting.
Germany's industrial output increased in June on a sequential basis, according to the latest data from the Federal Statistical Office or destatis.
The seasonally and calendar adjusted production expanded at a faster pace of 0.4% in June after growing at 0.1% in May.
However, the factory production fell 0.5% from a year ago.
The DAX index fell 0.6% to 13,573.83, the CAC-40 index declined 0.6% 6,472.95, and the FTSE 100 index inched down 0.1% to 7,439.78.
London Stock Exchange Group gained 3.8% to 8,456 pence after the financial exchanges operator announced its plan to buy back its shares.
WPP Plc plunged 5.6% to 839.28 pence after the advertising group reported sales growth but the worries of global economic slowdown weighed.
Deutsche Post AG increased 4.5% to 41.75 euros after the parent of DHL posted better-than-expected quarterly results.
Pirelli & C. SpA increased 4.3% to 4.43 euros after the tiremaker reported first-half sales rose 24.6% to 3.2 billion euros and net income surged 76% to 233.0 million from 131.6 million euros a year ago.
The sales increase was driven by roughly 20% increase in prices and volume mix and the positive impact from the foreign exchange contributed 5% points.
Tire tire sales volume increased 1% in the first-half.
Credit Suisse Group AG fell 0.4% to 5.25 Swiss francs on the local news that the global financial services company is looking to eliminate "thousands" of positions.
Asian Markets Brave Higher, China Flies Missiles Over Taiwan
Asian markets traded higher despite the simmering tensions between the U.S. and China.
China stepped up its military exercises and in a grand display of its military might fired several missiles over Taiwan for the first time. China also launched missiles that landed near Japan.
Moreover, China's foreign ministry imposed sanctions on the U.S. House Speaker Nancy Pelosi and against her immediate family.
Stocks in Hong Kong gained followed by advances in tech sector on the hopes that the tensions escalations with the U.S. may deepen the semiconductor chip shortages.
Tokyo stocks gained despite the rising military tensions in the region as investors reacted to the latest batch of positive earnings from Nippon Steel and Kikkoman.
Fast Retailing, the parent of Uniqlo, announced its plans of aggressive expansion across North America.
The Nikkei 225 index increased 0.9% to 28,175.87, the Hang Seng index inched up 0.1% to 20,201.94, and the Sensex index gained 0.1% to 58,387.93.
The Reserve Bank of India lifted its key lending rate by 50 basis points, the third rate increase in a row.
The central bank lifted the repo rate by 50 basis points to the pre-pandemic level of 5.4% and retained real GDP growth estimate at 7.2% and inflation estimate at 6.7% for the current fiscal year.
The repo rate is the rate at which commercial banks in India borrow from the Reserve Bank against the collateral of Indian government bonds or other approved treasury securities.
Australian market indexes closed at two-month highs after the gains in mineral and mining sector outweighed the weakness in energy sector.
The ASX 200 Index gained 0.6% to 7,015.60 and the All Ordinaries Index increased 0.6% to 7,250.30.
Lyft Loss Expands as Active Rider Base Growth Slows
Scott Peters
05 Aug, 2022
New York City
Lyft Inc soared 14.5% to $19.92 after the ride-hailing company reported second quarter revenues jumped 30% from a year agon and 19% from the previous month to $990.7 million.
Net loss in the quarter rose to $377.2 million from $251.9 million a year ago.
Active riders in the second quarter increased 15.9% to 19,8 million and revenue per active rider jumped 11.8% to $49.89.
DoorDash Revenues Rise 30%
Scott Peters
05 Aug, 2022
New York City
DoorDash increased 1.1% to $82.30 after the delivery company reported revenues in the second quarter increased 30% to $1.6 billion and total orders rose 23% to 426 million.
Net loss surged to $263 million from $102 million a year ago.
Excluding the recent acquisition Wolt, marketplace gross order volume grew 22% from a year ago to $12.8 billion, driven primarily by growth in average order frequency and new customers.
The price inflation lifted the average order size, but its contribution to the gross order volume was small.
Excluding Wolt, second quarter loss measured following the GAAP was $218 million.
Wolt GAAP Net Loss for the period from May 31 through the end of second quarter in June was $45 million.
The delivery company believes that its penetration remains below 5% of the restaurant delivery market and well below 1% of the convenience, groceries and non-food spending.
DoorDash is investing in its logistics capabilities to transform the demand-generating platform, where the selection is limited to restaurants or merchants with delivery staff, to logistics-enabled platform where the company can provide more reliable and consistent delivery experience.
Expedia Bookings and Revenues Soar
Scott Peters
05 Aug, 2022
New York City
Expedia Group fell 1.1% to 101.02 and the online travel booking platform operator reported stronger-than-expected revenues and earnings in its latest quarterly report.
Gross bookings soared 26% to $26.1 billion as travel demand further improved on higher demand for lodging, air and other products.
Bookings for hotels soared 57% from a year ago and 8% higher than in the second quarter of 2019, the previous peak.
Second quarter revenues increased 51% to $3.2 billion and net loss shrank to $185 million from $301 million a year ago.
Labor Market Returns to Pre-pandemic Level With July Additions
Brian Turner
05 Aug, 2022
New York City
The U.S. labor market continued to expand for the nineteenth month in a row and has now regained the 22.0 million jobs lost during the first two months of pandemic in March and April 2020.
July payrolls increased 528,000 following the 372,000 additions in June, the Bureau of Labor Statistics said Friday.
The unemployment rate declined to 3.5%.
Both the non-farm employment and jobless rates have returned to their February 2020 pre-pandemic level.
The sharp accelerations in payroll additions surprised many economists who were looking for an increase of less than 265,000 according to an informal survey of six economists conducted by Ticker.com.
Investors worried that the larger-than-expected payrolls gains despite the slowing economic backdrop may support the Federal Reserve's case for raising rates at a faster pace at its next meeting.
The latest labor market data will certainly encourage the policymakers to lift rates by as much as 75 basis points at its next two-day meeting ending on September 21.
The yield on 10-year U.S. Treasury notes shot up to 2.85% and 2-year notes jumped to 3.255%.
While the demand for workers remains strong the availability is not rebounding as strongly as it was in the beginning of 2022.
The labor force participation rate declined to 62.1% in July from 62.2% in June, its third monthly decline in a row.
The imbalance in the supply and demand of workers is showing up in wages.
The average hourly wages rose by 15 cents, or 0.5% from the previous month to $32.27 and the annual rate of wage growth was unchanged at 5.2%.
The smaller increases in wage growth are certainly lagging the broader inflation in the economy.
Strong Labor Market Recovery In July Lifted Bond Yields, Stocks Meander
Barry Adams
05 Aug, 2022
New York City
Stocks on Wall Street traded lower after stronger-than-expected jobs report shifted the focus to the next rate hike amount.
July payrolls increased 528,000 following the 372,000 additions in June, the Bureau of Labor Statistics said Friday.
The unemployment rate declined to 3.5%.
Both the non-farm employment and jobless rates have returned to their February 2020 pre-pandemic level.
The sharp accelerations in payroll additions surprised many economists who were looking for the increase of less than 265,000 according to an informal survey of six economists conducted by Ticker.com.
Investors worried that the larger-than-expected payrolls gains despite the slowing economic backdrop may support the Federal Reserve's case for raising rates at a faster pace at its next meeting.
The latest labor market data will certainly encourage the policymakers to lift rate by as much as 75 basis points at its next two-day meeting ending on September 21.
The yield on 10-year U.S. Treasury notes shot up to 2.85% and 2-year notes jumped to 3.255%.
The S&P 500 index fell 0.7% to 4,123.42 and the Nasdaq Composite declined 1.1% to 12,588.30.
Expedia Group fell 1.1% to 101.02 and the online travel booking platform operator reported stronger-than-expected revenues and earnings in its latest quarterly report.
Gross bookings soared 26% to $26.1 billion as travel demand further improved on higher demand for lodging, air and other products.
Bookings for hotels soared 57% from a year ago and 8% higher than in the second quarter of 2019, the previous peak.
Second quarter revenues increased 51% to $3.2 billion and net loss shrank to $185 million from $301 million a year ago.
DoorDash increased 1.1% to $82.30 after the delivery company reported revenues in the second quarter increased 30% to $1.6 billion and total orders rose 23% to 426 million.
Net loss surged to $263 million from $102 million a year ago
Lyft Inc soared 14.5% to $19.92 after the ride-hailing company reported second quarter revenues jumped 30% from a year agon and 19% from the previous month to $990.7 million.
Net loss in the quarter rose to $377.2 million from $251.9 million a year ago.
Active riders in the second quarter increased 15.9% to 19,8 million and revenue per active rider jumped 11.8% to $49.89.
European Markets View Latest Earnings with Caution
Bridgette Randall
05 Aug, 2022
Frankfurt
European markets traded sideways before and after the release of the keenly awaited July labor market survey in the U.S.
Investors were cautious on the simmering tensions between the U.S. and China.
China escalated its largest-ever military exercises near Taiwan and fired several missiles over the island nation.
At least five missiles landed as far as the southernmost islands of Okinawa, Japan.
China's foreign ministry placed sanctions on the U.S. House Speaker Nancy Pelosi and her immediate family members.
The U.S. added 528,000 payrolls in July after adding 372,000 in June, the U.S. Bureau of Labor Statistics reported Friday.
The sharply higher payroll additions were broad based and highlighted the strength in the labor market despite the economic slowdown but also raised the fears of larger interest rate hike at the next Fed's meeting.
Germany's industrial output increased in June on a sequential basis, according to the latest data from the Federal Statistical Office or destatis.
The seasonally and calendar adjusted production expanded at a faster pace of 0.4% in June after growing at 0.1% in May despite the persistent supply chain problems and a four-decade high inflation.
However, the factory production fell 0.5% from a year ago.
Market sentiment win the region was subdued after the Bank of England issued negative views on the economy and guided longer and deeper recession starting as early as this year.
The central bank also said inflation is likely to peak at 13% before turning lower.
The DAX index fell 0.2% to 13,635.10, the CAC-40 index declined 0.3% 6,492.45, and the FTSE 100 index inched up 0.2% to 7,465.88.
London Stock Exchange Group gained 1.6% to 8,264 pence after the financial exchanges operator announced its plan to buy back its shares.
WPP Plc plunged 9.5% to 813.20 pence after the advertising group reported sales growth but the worries of global economic slowdown weighed.
Deutsche Post AG increased 5.5% to 42.15 euros after the parent of DHL posted better-than-expected quarterly results.
Pirelli & C. SpA increased 4.4% to 4.44 euros after the tiremaker reported first-half sales rose 24.6% to 3.2 billion euros and net income surged 76% to 233.0 million from 131.6 million euros a year ago.
The sales increase was driven by roughly 20% increase in prices and volume mix and the positive impact from the foreign exchange contributed 5% points.
Tire tire sales volume increased 1% in the first-half.
Credit Suisse Group AG fell 0.4% to 5.24 Swiss francs on the local news that the global financial services company is looking to eliminate "thousands" of positions.
Asian Markets Advance Despite China Missiles Landing Near Japan
Arjun Pandit
05 Aug, 2022
New York City
Asian markets traded higher despite the simmering tensions between the U.S. and China.
China stepped up its military exercises and in a grand display of its military might fired several missiles over Taiwan for the first time. China also launched missiles that landed near Japan.
Moreover, China's foreign ministry imposed sanctions on the U.S. House Speaker Nancy Pelosi and against her immediate family.
Stocks in Hong Kong gained followed by advances in tech sector on the hopes that the tensions escalations with the U.S. may deepen the semiconductor chip shortages.
Tokyo stocks gained despite the rising military tensions in the region as investors reacted to the latest batch of positive earnings from Nippon Steel and Kikkoman.
Fast Retailing, the parent of Uniqlo, announced its plans of aggressive expansion across North America.
The Nikkei 225 index increased 0.9% to 28,175.87, the Hang Seng index inched up 0.1% to 20,201.94, and the Sensex index gained 0.1% to 58,387.93.
The Reserve Bank of India lifted its key lending rate by 50 basis points, the third rate increase in a row.
The central bank lifted the repo rate by 50 basis points to the pre-pandemic level of 5.4% and retained real GDP growth estimate at 7.2% and inflation estimate at 6.7% for the current fiscal year.
The repo rate is the rate at which commercial banks in India borrow from the Reserve Bank against the collateral of Indian government bonds or other approved treasury securities.
Australian market indexes closed at two-month highs after the gains in mineral and mining sector outweighed the weakness in energy sector.
The ASX 200 Index gained 0.6% to 7,015.60 and the All Ordinaries Index increased 0.6% to 7,250.30.