Stocks Meandered After Nonfarm Payrolls Report

Barry Adams
07 Jul, 2023
New York City

Stocks lacked direction and market indexes turned volatile after the release of nonfarm payrolls for June. 

Non-farm payrolls for June increased 209,000 and fell sharply from the downwardly revised 306,000 in May, the U.S. Bureau of Labor Statistics reported Friday. 

Jobless rate remained unchanged at 3.6% in the month. 

Labor market conditions are still tight and wage growth is moderating, but still inconsistent with the Federal Reserve's target rate of 2%.  

The JOLT report showed yesterday employee quit rate declined to the pre-pandemic level in May, suggesting the supply and demand are in better balance than before. 

The official report followed the ADP report  that showed private sector employment surged in June where half the gains were driven by increases in the leisure & hospitality sector. 

Financial markets are on high alert for indications that the Federal Reserve may increase at a faster pace after pausing in June. 

The latest FOMC policy meeting minutes showed that several committee members noted that most of the impact of the 500 basis points of increase in rates have already been felt in the economy. 

Yet, consumer price inflation is significantly above the central bank's target rate of 2%. 

Ten interest rate hikes in the last one years and the regional banking turmoil has failed to slow down the U.S. economy because of consumer spending supported by above average growth in real disposable personal income and excess savings.

World markets have been on hold on the worries of rising prospects of higher interest rates and what it means for local economies. 

The Nikkei index in Tokyo declined 1.2%, the Hang Seng index in Hong Kong fell 0.9%, the KOSPI index in Seoul decreased 1.1% and the Sensex index in Mumbai dropped 0.8%. 

 

U.S. Indexes & Yields 

The S&P 500 index futures traded higher 0.02% to 4,444.97 and the Nasdaq Composite edged higher 0.3% to 13,729.69.

The yield on 2-year Treasury notes increased to 5.01%, 10-year Treasury notes inched higher to 4.06% and 30-year Treasury bonds edged up to 4.01%. 

Crude oil increased $0.30 to $71.98 a barrel and natural gas prices increased 4 cents to $2.65 a thermal unit. 

 

Stock Movers 

Levi Strauss & Company dropped 6.6% to $13.28 after the denim maker tightened its annual earnings outlook. 

Adjusted earnings in the fiscal second quarter was 4 cents and revenue was $1.34 billion, meeting the estimate of 3 cents a share and $1.34 billion in revenues. 

The denim maker revised its adjusted earnings outlook for the full-year between $1.10 and $1.20 a share from the previous estimate between $1.30 and $1.40 a share. 

Biogen Inc gained 0.4% to $286.12 after the company and its Japan-based partner Eisai Co Ltd won an approval from the U.S. FDA for its Alzheimer's treatment, Leqembi.  

Despite the approval, Eisai dropped as much as 8% before recovering to close down 4.5% in Tokyo trading.