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DJI edges down, S&P 500 declines, Nasdaq slides ~1.5%
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Tech weakest S&P 500 sector; staples lead gainers
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Euro STOXX 600 index off ~0.3%
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Dollar edges up; gold slips; crude, bitcoin decline
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U.S. 10-Year Treasury yield edges rises to ~3.55%
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MORE COMPREHENSIVE 2022 Q2 JOBS DATA RAISE HARD LANDING RISK
(1102 EST/1602 GMT)
When it comes to data on the U.S. labor force, benchmark
revisions are usually of more interest to economists than the
market, says Marc Chandler, chief market strategist at
Bannockburn Global Forex.
A look at more comprehensive labor data in last year's
second quarter indicates the U.S. jobs market wasn't as
resilient at the time as many traders believed, he says.
"Revisions don't really capture the imagination of market participants," says Chandler. "This time because of the stark contrast with the official data, maybe they will." The data gives ammunition to those who expect the Fed will cut interest rates later this year, but also suggests a harder landing may be in store because the U.S. economy is actually weaker than recent GDP numbers suggest, Chandler says. "We've had a honeymoon period in which people think maybe you can have a soft landing. This raises questions about how soft of a landing," he says. The difference between the number of gross job gains and gross job losses resulted in a net employment loss of 287,000 private sector jobs during the March to June period in 2022, the U.S. Bureau of Labor Statistics reported last week.
Research by the Federal Reserve Bank of Philadelphia that
examined comprehensive labor data for the second quarter also
indicates a weaker U.S. jobs market.
U.S. payroll jobs remained essentially flat from March
through June last year rather than just over 1 million new jobs
that were shown in BLS's current employment statistics (CES).
"In the aggregate, 10,500 net new jobs were added during the
period rather than the 1,121,500 jobs estimated by the sum of
the states; the U.S. CES estimated net growth of 1,047,000 jobs
for the period," the Philly Fed said in a December report.
(Herbert Lash)
*****
U.S. STOCKS DIP AS BIG WEEK FOR EARNINGS, CENTRAL BANKS
KICKS OFF (1003 EST/1503 GMT)
Wall Street's main indexes are mixed early on Monday as the
busiest week of the earnings season gets underway, and ahead of
key central bank meetings.
The IXIC quickly fell to test its 200-day moving average,
around 11,495, which should now attempt to act as support. On
Friday, the IXIC registered its first close back over this
closely followed long-term moving average in more than a year.
So far on Monday, the IXIC has hit a low of 11,478. It is
now back up to around 11,540. Chips and FANGs are early underperformers, and tech is among weaker
S&P 500 sectors.
Defensive groups are among those SPX sectors in positive
territory.
Markets await key central bank meetings including the Fed,
ECB and BOE, as well as a number of earnings reports from tech
titans coming this week.
Here is a snapshot of where markets stood around just after
1000 EST:
(Terence Gabriel)
*****
NASDAQ COMPOSITE: ANOTHER BRICK IN THE WALL FALLS (0900
EST/1400 GMT)
The Nasdaq Composite ended at about 11,622 on
Friday. With this, the tech-heavy index scored its first close
above its 200-day moving average in more than a year:
It was the first IXIC finish above this closely watched
long-term moving average since January 14, 2022. Subsequent near
touches throughout last year led to renewed selling pressure.
Bulls are still looking for the Nasdaq daily advance/decline
(A/D) line to confirm the Composite's feat. The A/D line
remains just shy of its descending 200-DMA. This breadth measure
has failed on its near touches of the long-term moving average
since late-July 2021.
Meanwhile, with the market focused on the results of this
week's FOMC meeting, due Wednesday at 2 PM EST, tech-titan
earnings from Meta Platforms after the close that same
day, and results from Apple , Amazon.com , and
Alphabet after the closing bell on Thursday, and the
DJI up six-straight sessions through Friday's close, it
may not be much of a surprise that e-mini Nasdaq 100 futures are suggesting an opening pullback on Monday.
The Composite is on track for its biggest monthly gain since
July, and its best January rise since 2001.
The 200-DMA should now attempt to provide support for the
IXIC just under 11,500.
(Terence Gabriel)
*****
FOR MONDAY'S LIVE MARKETS' POSTS PRIOR TO 0900 EST/1400 GMT
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(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)
