Closed yesterday for Independence Day, Wall Street is hesitant at the start of the session after monthly employment figures confirming a certain cooling of the world’s leading economy. The Nasdaq gained 0.48% to 18,274 points and the S&P 500 rose 0.15% to 5,545 points. The Dow Jones timidly lost 0.08% to 39,276 points. While job creations came out higher than expected in June, those of previous months were revised downwards, the unemployment rate increased and the growth of the average salary did not hold any bad surprises.
Reacting to these figures, bond rates are nosediving (the US 10-year is down nearly 5.1 bp to 4.308%) and investors are increasing their bets on a Fed rate cut in September. According to the CME Group’s FedWatch tool, the probability of a Federal Reserve rate cut in September, of at least 25 basis points, now exceeds 75%.
“Today’s jobs report should reinforce expectations for a September rate cut. Economic conditions are cooling, which makes the tradeoffs different for the Fed. Ultimately, the unemployment rate is rising and that’s what’s factored into the summary of economic projections,” Neil Dutta of Renaissance Macro Research told Bloomberg. “This is the kind of jobs report the Fed has been waiting for: softer but still decent data that could justify two rate cuts this year,” added Florian Ielpo, head of macro research at Lombard Odier IM.
Not much to report on the stock front. Tesla is still progressing and could thus sign an eighth consecutive session in the green. Bitcoin, on the other hand, is down by more than 5% to $55,300, its lowest since the end of February. All cryptocurrencies are falling against the backdrop of the drop in demand for Bitcoin ETFs and signs indicating that the distribution of Bitcoins to the creditors of Mt. Gox, the world’s leading cryptocurrency exchange before its demise in 2014, has begun. In total, the entire digital currency market has lost more than $170 billion in combined capitalization over the last 24 hours, according to data from ‘CoinGecko’.
The euro/dollar parity reached $1.0823. The barrel of Brent is stable at $87.4. The ounce of gold is trading at $2,381 (+1%).
Values
* Tesla (+0.7%). The American brand’s best-selling Model Y has been included by local authorities in China on a list of electric and plug-in hybrid vehicles as models eligible for public procurement, Chinese state media ‘The Paper’ reported. This is the first time that Tesla vehicles can be purchased by the government in China. In addition, environmental authorities in the German state of Brandenburg, where Tesla has built a gigafactory, have approved the group’s application to expand its Gruenheide plant, removing a hurdle in its growth plans.
* Macy’s climbs 11.2% as Arkhouse Management and Brigade Capital Management raised their bid for the department store chain to about $6.9 billion, according to the Wall Street Journal, citing people familiar with the matter. The new proposal would buy the Macy’s shares that Arkhouse and Brigade Capital do not already own for $24.80 each, up from $24 offered in March, the report said. Arkhouse, which owns 4.4% of Macy’s, had previously raised its offer to $24 from $21 a share. The current offer represents a premium of about 43% to Macy’s closing price on Dec. 8, when the negotiations began.
* Amazon (+1.2%). The European Commission has asked the American giant to provide more information on the measures taken to comply with its obligations under the Digital Services Act (DSA).
