US Open: stocks mix to the rhythm of the NFP
US stocks trade mixed after US NFPs beat forecast. 943,000 jobs were added to the economy in July, up from 850,000 in June
- Dow Futures + 0.24% at 35132
- S&P Futures + 0.05% at 4428
- Nasdaq Futures -0.5% to 15107
- FTSE + 0.07% at 7126
- Dax + 0.2% at 15774
- Euro Stoxx + 0.3% at 4,173
Jobs, income and covid data at a glance
US stocks point to a mixed start on Friday after July’s non-farm payrolls were better than expected.
The NFP revealed that 943,000 were added to the economy in July, up from 850,000 in June and ahead of the 870,000 planned. The unemployment rate fell sharply to 5.4% from 5.9% in June.
The reopening of the economy has triggered a sharp increase in demand for labor observed in recent months. Today’s better-than-expected reading prompted a bet that the Fed may look to lower support sooner. This week we’ve already seen Fed officials take a slightly more hawkish bias and that was before this bullish report. Fed Governor Christopher Weller had said that with two more solid reports he would support reducing asset purchases – 1 down, 1 to go.
We know the Fed was looking for substantial progress in the labor market recovery and that’s exactly what we seem to see in the last two reports.
The US dollar jumped higher. The Dow Jones and the S&P also rallied as the Nasdaq slid lower, revealing a value rotation and exit from high-growth tech stocks that are particularly sensitive to future interest rate hikes.
What next for the Nasdaq?
After crossing the key psychological threshold of 15,000, the Nasdaq has reached new all-time highs. The trend remains bullish with the Nasdaq above its 50 and 100 sma on the 4 hour chart. The price has eased from the all-time high and the MACD may form a bearish cross which could support further losses. Immediate support can be seen at 15025 sma 50 ahead of 100 sma at 14930. It would take a move below 14785 to reverse the short term uptrend, beyond by 14470 could provide some support.
FX – USD pulls back against EUR after fall in German industrial production
The USD is up and is expected to gain during the week following upbeat comments in the NFP report from Federal Reserve officials this week, which supported the idea that the Fed is moving to reduce support earlier.
EUR / USD is underperforming after weaker than expected German industrial production. Production unexpectedly declined in June, extending losses from May. Industrial production fell -1.3% month-on-month, after declining downward from -0.8% in May.
- GBP / USD -0.2% to 1.3918
- EUR / USD -0.41% at 1.1806
Oil rises but is expected to suffer weekly losses
Oil prices are on the rise but are still on track for heavy weekly losses. Rising COVID cases in China and the United States are fueling demand concerns. China has already imposed travel restrictions on some cities in an attempt to curb the spread of the most contagious variant. Japan is also expected to expand its emergency restrictions.
Growing tensions in the Middle East are supporting the price of oil as hostilities between Iran and Israel escalate.
- US crude is trading +1.05% at $ 69.03
- Brent is trading +1.03% at $ 71.96
- 15:00 Wholesale inventories
- 6:00 p.m. Baker Hughes Platform Countdown