The CML Close - Stocks mixed, jobs ands wages crush estimates, bets on larger Fed hikes rise, the dollar rises - 08-05-2022
Markets
Stocks were mixed again while small-mid cap tech rose.
Non-farm payrolls came in much higher than estimates as did hourly average wages, pushing expectations of a 75 basis point Fed hike higher s signs of cooling wage inflation are non-existent.
| • SPX | 4,145.19 | -6.75 | (-0.16%) |
| • NASD | 12,657.55 | -63.03 | (-0.50%) |
| • DJIA | 32,803.47 | +76.65 | (+0.23%) |
| • R2K | 1,921.03 | +14.57 | (+0.76%) |
| • VIX | 20.78 | -0.66 | (-3.08%) |
| • Oil | 88.34 | -0.20 | (-0.23%) |
• The latest non-farm payrolls report showed that there are now more people employed than pre-COVID.
• The number of individuals unemployed for >27 weeks is falling sharply.
• Wage inflation is not cooling - trader bets for a 75 basis point Fed hike rise.
• The dollar rose due to the jobs report.
Headlines of the Day
Stocks Are Lower After Jobs Report
The U.S. economy added more than twice as many jobs as expected.
Payrolls increased 528,000 in July, much better than expected in a sign of strength for jobs market
"Nonfarm payrolls rose 528,000 for the month and the unemployment rate was 3.5%, easily topping the Dow Jones estimates of 258,000 and 3.6%, respectively. Wage growth also surged, as average hourly earnings jumped 0.5% for the month and 5.2% from a year ago, higher than estimates.
Traders are now pricing in a higher likelihood of a 0.75 percentage point hike for the next Federal Reserve meeting in September."
World Food Prices Post Biggest Decline Since 2008 in July
Drop offers some relief amid deepening cost-of-living crisis. Ukraine restarted some grain shipments after deal with Russia.
Cooling Semiconductor Sales Heighten Fears of a Global Recession
Slowdown in semiconductors is longest since US-China trade war. Sales’ 3-month moving average correlates with global economy.
U.S. Dollar Gets Stronger on Jobs Report. Here’s What Happens Next
U.S. July payroll numbers absolutely crushed expectations, pushing the dollar higher against almost every other currency.
Economic Data Results for 8-5-2022
Non Farm Payrolls JUL
The US economy added 528K jobs in July of 2022, much better than market forecasts of 250K and above an upwardly revised 398K in June.
United States Average Hourly Earnings YoY
Average Hourly Earnings YoY in the United States remained unchanged at 5.20 percent in July from 5.20 percent in June of 2022 ahead of estimates for 4.9%.
United States Labor Force Participation Rate
The labor force participation rate in the US edged down to 62.1 percent in July of 2022 from 62.2 percent in June.
Unemployment Rate JUL
The US unemployment rate decreased to 3.5% in July 2022, the lowest since February 2020, from 3.6% in the previous period, while analysts expected it to be unchanged.
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