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Trends & Analysis
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Trends & Analysis
News

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News

Gold continues to shine amid geopolitical worries

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News

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GBP/USD recovers following wage report

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Buy the JPMorgan dip?

News

Dow Jones index surges more than 100 points on NFP

 

Monday, September 04, 2023

Today’s headlines

What’s happening: US stocks closed mostly higher on Friday, following the release of the nonfarm payrolls (NFP) report.

What happened: The Dow Jones index gained more than 100 points after data released on Friday showed an increase in unemployment.

Although the S&P 500 also recorded gains, the tech-laded Nasdaq 100 settled slightly lower as traders digested other economic data from the US.

Why it matters: Wall Street stocks climbed on Friday following the release of nonfarm payrolls data, which showed an increase in jobs in the US.

The US economy added 187,000 jobs in August, topping market views of 170,000 job adds. The figure was significantly higher than the reading of 157,000 in July.

However, job gains remained below the 200,000 mark for the third straight month, signalling a gradual easing of the labour market. Moreover, the unemployment rate increased to 3.8%, reaching the highest level since February 2022 and coming at higher than market estimates of 3.5%. Average hourly earnings also rose by 0.2% to $33.82 in August, after 0.4% growth in the earlier month.

The condition of the job market fuelled speculations of the US Federal Reserve keeping rates on hold at its September meeting, which lent support to the stock market.

Although all three major indices rose in early trading on Friday, stocks pared gains as the session progressed, as investors digested economic data ahead of the Labor Day weekend. The ISM manufacturing PMI improved to 47.6 in August, from 46.4 in the previous month, but remained in the contraction zone for the tenth straight month.

Investors also assessed recent earnings reports from major companies in the US. Broadcom’s shares fell around 5.5% even after the company reported upbeat quarterly earnings, with traders being disappointed by its weak outlook for the current quarter. On the other hand, Lululemon Athletica’s stock gained 6% after the company reported strong second-quarter earnings and raised its annual guidance.

The Dow Jones index climbed 115.8 points, or 0.33%, to 34,837.71, while the S&P 500 added 0.18% to reach 4,515.77 on Friday. The Nasdaq 100 slipped 0.07% to settle at 15,490.86.

The 30-stock Dow Jones index gained 1.4% for the week to record its best performance since July, while the S&P 500 climbed 2.5%, notching its best week since June.

What to watch: With US markets closed on Monday for Labor Day, investors await the release of economic reports on factory orders and IBD/TIPP economic optimism index on Tuesday. New orders for manufactured goods in the US, which rose by 2.3% to $592 million in June, are expected to decline by 2% in July. Analysts expect the IBD/TIPP economic optimism index to improve to 44 in September, from 40.3 in August.

The markets today

Bitcoin will be in focus today after an uncertain start to September

Context: Bitcoin fell below the major $26,000 level following the US SEC’s decision to postpone Bitcoin ETF approvals.

Details: Crypto traders shorted Bitcoin through August, sending prices lower by more than 11%. Although September started on a more positive note, Bitcoin was unable to hold onto gains following the recent Grayscale triumph.

The US SEC (Securities and Exchange Commission) once again delayed its verdict on the approval of numerous spot Bitcoin ETF (exchange traded fund) applications until October, despite the recent legal win of Grayscale Investments.

The SEC has postponed its decision on spot Bitcoin ETF proposals from companies including BlackRock, Invesco Galaxy, Bitwise, WisdomTree, VanEck, Valkyrie Digital Assets and Wise Origin.

Prices for Bitcoin, the largest cryptocurrency by market valuation, rose 0.3% to $25,952 this morning, while Ethereum added 0.1% to reach $1,635.

What to watch: Investors will watch data releases by several countries to gauge the condition of the global economy. Markets will also monitor merchant adoption of cryptocurrencies.

Other Markets: European indices closed mostly lower on Friday, with Germany’s DAX 40, France’s CAC 40 and the STOXX Europe 600 Index down by 0.67%, 0.27% and 0.01%, respectively, and the FTSE 100 index up by 0.34%.

The news shaping the markets

Ukraine’s President Volodymyr Zelensky announced the departure of Defence Minister Oleksiy Reznikov. The news sent the safe-haven US dollar index lower this morning.


Australia’s Melbourne Institute Monthly Inflation Gauge rose 0.2% in August, versus a 0.8% increase in the prior month, lending support to the AUD/USD forex pair.


New Zealand’s merchandise terms of trade grew by 0.4% during the three months to June, compared to market expectations for a 1.5% decline, which sent the NZD/USD pair higher in forex trading this morning.


Brazil reported a wider trade surplus of $9.8 billion in August, compared to estimates of $9.75 billion, which lent support to the BRL/USD forex pair.


Ireland’s gross domestic product grew by 0.5% during the three months to June, versus a 2.6% decline in the prior period and sent the EUR/USD pair higher in forex trading this morning.

What else to watch today

Germany’s balance of trade and new passenger car registrations, Spain’s unemployment change, Turkey’s inflation rate, producer prices, balance of trade and total vehicle sales, Brazil’s IPC-Fipe inflation and Central Bank of Brazil focus market readout, Mexico’s gross fixed investment, Singapore’s manufacturing PMI, as well as France’s new passenger car registrations.


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