North American News
US major indices close the day with mixed results
- Major indices up on the week.
The major US stock indices are closing mixed. The Dow and S&P are down on the day while the NASDAQ index eked out a small gain. It was a choppy session for stocks with the US jobs report providing mixed signals.
For the week, the major indices were higher.
A look at the final numbers shows:
- Dow industrial average fell -46.4 points or -0.15% at 31338.16
- S&P index fell -3.26 points or -0.08% at 3899.37
- NASDAQ index rose 13.97 points or 0.12% at 11635.32
- Russell 2000 fell -0.23 points or -0.01% at 1769.36
For the trading week all the indices were higher led by the NASDAQ index:
- Dow industrial average rose 0.77%
- S&P index rose 1.94%
- NASDAQ rose 4.56%
- Russell 2000 rose to 2.22%
Looking at the Dow 30 this week, the gains were led by:
- Nike, up 6.67%
- Apple up 5.84%
- Intel up 4.54%
- Salesforce up 4.34%
- Microsoft up 3.11%
The Dow losers this week included:
- Walgreens, -2.62%
- Chevron -2.55%
- Verizon -2.23%
- Coca-Cola -1.93%
- Travelers -1.27%
US June non-farm payrolls +372K vs +268K expected
- June 2022 US employment data from the non-farm payrolls report
- Prior was +390K (revised to +384K)
- Estimates ranged from +90K to +400K
- Two month net revision K
- Unemployment rate 3.6% vs 3.6% expected
- Prior unemployment rate 3.6%
- Participation rate 62.2% vs 62.3% prior (was 63.4% pre-pandemic)
- Underemployment rate 6.7% vs 7.1% prior
- Average hourly earnings +0.3% m/m vs +0.3% expected
- Average hourly earnings +5.1% y/y vs +5.0% expected (prior 5.2%)
- Average weekly hours 34.5 vs 34.6 expected
- Change in private payrolls +381K vs +240K expected
- Change in manufacturing payrolls +29K vs +15K expected
- Long-term unemployed at 1.3m vs 1.2m pre-pandemic)
- The employment-population ratio 59.9% vs 61.2% before pandemic
- Birth-death adjustment +64K
US May consumer credit outstanding +22.35B vs +31.9B expected
- Slower credit growth than anticipated
- Prior was +38.07B (revised to +36.76B)
- Revolving +7.42B
- Non-revolving +22.35B
Commodities
Steep outflows could trigger a substantial downside for gold in coming sessions – TD
- Gold up $6 to $1745 today
TD Research sees a scope for a bid downside pressure on gold over the coming sessions.
“A major capitulation event may be unfolding in gold…We see evidence that the steepest outflows from broad commodity funds since the Covid-19 crisis may be catalyzing a series of cascading liquidations from various speculative groups. This argues for substantial downside for gold in coming sessions as participants are forced to sell in a vacuum,” TD notes.
“Indiscriminate selling by broad commodity funds has now sufficiently weighed on price action in gold to catalyze a break below a critical threshold for a change in gold’s trading regime,” TD adds.
Crude oil futures settle at $104.79
- Up $2.06 or 2.01% on the day
The price of WTI crude oil is settling at $104.58, up $2.06 or 2.01%.
The low for the day reached $101.54. The high reached $105.21. Key event next week, Biden heads to Saudi Arabia.
EU News
European indices close mostly higher on the day and for the week
- Spain’s Ibex is the exception
The major European indices are ending the day and the week mostly higher. The exception is the Spain’s Ibex which saw declines today and declines for the week.
A snapshot of the day shows:
- German DAX, +1.34%
- France’s CAC, +0.44%
- UK’s FTSE 100 +0.1%,
- Spain’s Ibex, -0.27% Spain’s
- Italy’s FTSE MIB, +1.0%
For the trading week:
- German DAX, +1.58%
- France’s CAC, +1.72%
- UK’s FTSE 100 +0.48%
- Spain’s Ibex -0.93%
- Italy’s FTSE MIB +1.93%
Other News
Feds Williams: Debate of 50-75 bps is right position for July meeting
- NY Fed President Williams speaking
- Debate of 50-75 basis points is right position for July meeting
- More data to come, but Fed still need to move expeditiously to more normal rate levels
- Fed funds rate at 3% to 3.5% by year end, but a lot of uncertainty after that
- Terminal level of rate hike cycle will hinge on behavior of inflation , and inflation expectations
- rising market interest rates are affecting the economy, but full effect of the Fed pivoted won’t be apparent until later in the year
- spending data is probably the 1st place where global slowdown will be seen. Jobs will lag
- expects to get some help from supply-side, but demand and supply must be aligned
- commodity price reversals could have a dis-inflationary impact
- recession not base case but clear the economy is slowing
- negative GDP in Q1 enter data into the spring not a signal of something fundamentally negative
Cryptocurrency News
Fed’s Brainard: Crypto platforms are highly vulnerable to deleveraging and fire sales
- Now she tells us
- We cannot wait until the crypto econosystem becomes so big and interconnected that it could pose financial stability risks
- “This is the right time to ensure that like risks are subject to like regulatory outcomes and like disclosure so as to help investors distinguish between genuine, responsible innovation and the false allure of seemingly easy returns that obscures significant risk”
Regulation is coming, but slowly.