Home Stock Market lobal Stocks Steady as U.S. Jobs Growth Slows, Dollar Weaker

lobal Stocks Steady as U.S. Jobs Growth Slows, Dollar Weaker

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Global stocks displayed a steady performance on Friday, with MSCI’s global equity index ending the session virtually unchanged, while the dollar weakened. The reason behind this mixed market sentiment was the release of government data revealing that U.S. jobs growth in June fell short of expectations, leading to reduced concerns regarding potential rate hikes by the Federal Reserve.

Despite investors holding onto hope for a more accommodative stance from the Federal Reserve, they approached the upcoming week with caution. The week ahead will feature crucial U.S. inflation readings and the commencement of the second-quarter earnings season, which could have a significant impact on market dynamics.

Official nonfarm payroll data for the U.S. showed that employers added 209,000 new hires in June, a figure below forecasts. Additionally, May’s numbers were revised downward by 33,000 to 306,000. Nevertheless, the unemployment rate declined to 3.6% in June from 3.7% in May, and average hourly earnings rose by 0.4%, the same as in May.

While the government data initially prompted a relatively muted market reaction, stocks gained some ground during the session before retracing their steps in afternoon trading. Quincy Krosby, Chief Global Strategist at LPL Financial, noted that investors are proceeding with caution as they head into a critical week marked by the beginning of the earnings season and a significant inflation reading.

Earlier in the session, traders seemed relieved that the payrolls figures came in lower than expected, particularly in light of the positive data from private payroll provider ADP earlier in the week. Sam Stovall, Chief Investment Strategist at CFRA Research, suggested that investors may have realized that they had overreacted on Thursday and subsequently took a more measured approach.

Stovall added that investors generally maintained a bullish mindset, considering near-term weakness in the market as a buying opportunity. However, the Dow Jones Industrial Average fell by 0.55%, or 187.38 points, to close at 33,734.88. The S&P 500 also experienced a decline of 0.29%, or 12.64 points, ending the day at 4,398.95. The Nasdaq Composite dropped 0.13%, or 18.33 points, closing at 13,660.72.

MSCI’s global equity index exhibited a minimal decline of 0.05% after initially rising by as much as 0.6% earlier in the day. Emerging market stocks also experienced a slight decrease of 0.41%.

Although market expectations still indicate more than a 90% likelihood of a quarter-point rate hike by the Federal Reserve in late July, predictions for an additional hike in September slightly diminished, according to CME Group’s FedWatch tool.

In response to the labor market data, the dollar weakened as some traders began to speculate that the Federal Reserve might cut rates sooner than previously anticipated. Concurrently, the yen made significant gains against the dollar.

The dollar index declined by 0.795%, with the euro strengthening by 0.73% to reach $1.0965. The Japanese yen exhibited a robust 1.40% appreciation against the greenback, with an exchange rate of 142.10 per dollar. Meanwhile, the British pound traded at $1.2835, representing a 0.75% increase for the day.

U.S. Treasury yields fluctuated on Friday, with longer-dated yields rising while some shorter-dated yields declined. The jobs data helped ease concerns that the Federal Reserve could adopt a more aggressive stance on rate hikes.

Benchmark 10-year notes experienced a 2.3 basis point increase, reaching 4.064%, compared to 4.041% at the previous session’s close. The 30-year bond’s yield rose by 4.6 basis points to 4.0491%, from 4.003%. However, the 2-year note yielded 4.9459% after a 6 basis point decrease.

In the commodities market, oil prices reached six-week highs as concerns about supply outweighed fears of reduced demand due to potential rate hikes and slower economic growth.

U.S. crude settled up by 2.87% at $73.86 per barrel, while Brent finished the day at $78.47, representing a 2.55% increase.

Spot gold rose by 0.7% to reach $1,924.13 per ounce, while U.S. gold futures gained 0.89% to close at $1,925.60 per ounce.

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dan saada

Dan hold a master of finance from the ISEG (France) , Dan is also a Fan of cryptocurrencies and mining. Send a tip to: 0x4C6D67705aF449f0C0102D4C7C693ad4A64926e9

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