Wall Street withdrew due to weak employment data

Lawrence Delevingne

BOSTON (Reuters)-Wall Street began to be pessimistic on Wednesday after data showed that employment growth in the United States slowed down in July, pushing the stock market and oil prices down, and U.S. Treasuries were flat.

The increase in private employment in the United States in July was much lower than expected, which may be constrained by shortages of workers and raw materials. The ADP National Employment Report released on Wednesday showed that employers added 330,000 jobs last month, while economists surveyed by Reuters predicted an increase of 695,000.

It plunged 151.96 points, or 0.43%, to 34,964.44, down 10.65 points, or 0.24%, to 4,412.5, and increased 3.64 points, or 0.02%, to 14,764.94.

“Given the weak ADP data and the bond market clearly hint at a slowdown in future growth, the market is surprisingly resilient,” said Nancy Tengler, chief investment officer of Laffer Tengler Investments, a Nashville-based asset management company.

She pointed to positive growth indicators for manufacturing inventory and service demand, but mentioned concerns about China’s COVID and related economic slowdown.

The MSCI Global Stock Index rose 0.09%.

After the government said it was considering reducing issuance and employment reports, traders pushed the yields on US Treasuries lower. The yield subsequently stabilized to the pre-opening level.

The price of the 10-year Treasury bond fell 3/32 from 1.174% late Tuesday, with a yield of 1.1837%.

As vaccines continue to be launched rapidly in developed markets, strong corporate profits have eased concerns about the COVID-19 pandemic. But investors are also weighing inflationary pressures, and more and more people believe that the Fed may soon hint that it intends to reduce support for the economy.

St. Louis Federal Reserve Bank President James Brad said on Wednesday that the US labor market may recover at a rate of about 500,000 jobs per month. In an online interview with The Washington Post, Brad said that returning to pre-pandemic employment levels by next summer will help reduce asset purchases and raise interest rates next year if necessary.

Investors are waiting for the latest U.S. non-agricultural employment data to be released on Friday-this is the last data before Fed leaders meet in Jackson Hole, Wyoming to discuss policies and decide on future stimulus strategies.

Since the spread of the Delta variable in the largest consumer country exceeds the geopolitical tensions in the Middle East and the decline in US inventories, oil prices are negative. It recently fell 2.1% to 69.08 US dollars per barrel, to 71.26 US dollars, down 1.59% on the day.

The euro rose by 0.137% and the euro fell by 0.07% to 1.1852 US dollars.

Due to the weakness of the US dollar, the price of gold rose slightly, but the rise before the release of the US employment data later this week was suppressed, which is regarded as the key to the Fed’s monetary policy strategy.

It rose 0.3% to $1,815.27 per ounce. The United States rose 0.58% to $1,820.60 per ounce.