Home Stock Market Market Response Mixed as June Jobs Report Misses Expectations

Market Response Mixed as June Jobs Report Misses Expectations

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In a mixed market response, the June jobs report revealed that job creation fell short of expectations, igniting speculation on the Federal Reserve’s stance. While the number of new jobs created slowed, wage growth outperformed estimates, providing a glimmer of hope for investors. The news prompted a surge in energy stocks, but also prompted denim retailer Levi Strauss to revise its earnings guidance. In the midst of these developments, both Rivian and Alibaba showcased strong performance.

The report unveiled that the US economy added 209,000 jobs in June, missing the projected figure of 225,000. This marked a significant decline from the previous month’s creation of 306,000 jobs and represented the slowest pace of job growth since December 2020. However, the news was not entirely grim as average hourly earnings, which indicate wage growth, rose by 4.4% in June, surpassing the estimated growth rate of 4.2%.

Investors have been closely monitoring the Federal Reserve’s stance amid the changing economic landscape. While expectations for a rate hike in July remained firm, the cooling labor market has sparked hopes that the Fed may adopt a less hawkish approach in the future. Market analysts at Morgan Stanley noted that the data supports their belief that the bar for a rate hike in September will not be met, lending further credence to the notion of a less aggressive monetary policy.

As the stock market absorbed the jobs report there were different effects, the energy stocks took the lead, offering reassurance amidst concerns of a potential recession and the outlook for oil demand. Companies such as Halliburton, Diamondback Energy, and Schlumberger experienced notable gains, with the latter surging by over 8%.

In a different path, denim retailer Levi Strauss faced a challenging day as its stock declined by more than 8%. The company closely revised its annual earnings guidance. This was done after reporting quarterly results that showcased strong earnings but in-line sales, coupled with a dip in wholesale revenue. Levi Strauss adjusted its projected range for adjusted diluted earnings per share (EPS) for 2023 from $1.30 to $1.40 down to $1.10 to $1.20. Additionally, the company revised its revenue growth outlook to between 1.5% and 2.5%, compared to the previous range of 1.5% and 3%. This news prompted Goldman Sachs to reduce its price target on Levi Strauss stock.

Amidst the market fluctuations, electric vehicle manufacturer Rivian enjoyed a significant surge of over 8%. This boost came after Wedbush, a prominent investment firm, upgraded its price target for Rivian from $25 to $30. The upgrade was driven by increased confidence in Rivian’s ability to meet or surpass its delivery targets in the second half of 2023 and in 2024. Rivian recently exceeded market estimates by delivering 12,640 vehicles in the second quarter, solidifying its positive trajectory.

In a better than before development for the Chinese conglomerate Alibaba, its stock soared by more than 8%. The company moved a step closer to leaving the regulatory spotlight in China following a fine of $984 million imposed on its affiliate, Ant Group, by Chinese authorities.

The market’s reaction to the June jobs report showcased a mix of optimism and caution. While job creation fell short of expectations, the robust wage growth provided a silver lining. Investors continue to closely observe the Federal Reserve’s actions and statements for indications of its future policy direction. A the energy stocks slowly surged and Levi Strauss faced challenges, Rivian and Alibaba demonstrated strong performance, capturing investors’ attention.

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Pankaj K

Pankaj is a skilled engineer with a passion for cryptocurrencies and blockchain technology. With over five years of experience in digital marketing, Pankaj is also an avid investor and trader in the crypto sphere. As a devoted fan of the Klever ecosystem, he strongly advocates for its innovative solutions and user-friendly wallet, while continuing to appreciate the Cardano project. Like my work? Send a tip to: 0x4C6D67705aF449f0C0102D4C7C693ad4A64926e9

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