4:15pm: Nasdaq Composite outpaces Dow and S&P 500
The Dow closed Thursday down 85 points, 0.3%, at 32,727, while the Nasdaq Composite added 52 points, 0.4%, to reach 12,721 and the S&P 500 ticked down 3 points, less than 0.1%, to 4,152.
The relative lack of movement could be a sign of investors waiting on Friday’s jobs report. Economists project that roughly 250,000 jobs were added in July, which would be lower than 372,000 in June, according to media reports. The jobless rate is forecast to remain unchanged at 3.6%, according to FactSet.
“I would certainly consider today one of those wait-and-see days while we wait for the most important piece of data that comes out this week,” said Art Hogan, chief market strategist at B. Riley Financial, as reported by CNBC.
12.05pm: US stocks finding it harder to maintain strong run
Two of the major US indices were in bear territory at midday, as the market reviewed US jobless claims – plus Walmart’s news of laying off hundreds of corporate roles – and as gold continues to weather economic uncertainty.
The Dow Jones Industrial Average was down 0.2% at 32,750 points, the S&P 500 was down by 0.3% at 4,153, but the Nasdaq Composite ticked upward by 0.1% at 12,685.
Edward Moya, senior market analyst for the Americas with OANDA, said it’s not surprising to hear that Walmart is reducing its staff.
“Layoff announcements seem to be a growing theme across corporate America but as long as the number of job openings remains roughly 50% above pre-pandemic levels, the Fed’s fight against inflation won’t ease up,” Moya said.
Moya noted that gold is rallying as The Street has become absorbed with an economic slowdown globally, “that will get much worse by year end.”
Risk assets wobbling
Chris Beauchamp, chief market analyst with IG, said that, “Despite Wednesday’s bounce, stocks are finding it hard to maintain their recent strong run.”
He added that, after a solid earnings season so far, the sheer number and profile of those stocks reporting are beginning to decline.
“Fundamentally, the dip buying over the past month has been valuation-based, and with earnings estimates for coming quarters still heading lower stocks are rapidly running out of room for more gains,” Beauchamp said.
At midday, the major movers included online marketplace operator MercadoLibre, up over 15% on strong earnings results on Wednesday, and human resources software provider Ceridian, up over 9%, also on a strong 2Q earnings report which beat analyst estimates.
Also at midday, DXC Technology was down 18%, following the IT services provider’s report of lower-than-expected earnings results for the first quarter of fiscal 2023. Cybersecurity firm Fortinet, despite delivering positive earnings for 2Q, dropped 17% on cuts to its service revenue guidance.
10.00am: Claims up
The US initial jobless claims were 260,000 last week, near the highest level since November, in line with estimates but still a gain of 6,000 from the previous week’s downwardly revised level, the Labor Department said.
The jobless claims number comes a day before the Bureau of Labor Statistics releases its much anticipated non-farm payrolls report for July which is expected to show the US economy added 258,000 positions in the month, compared with the 372,000 initial June estimate and the lowest total since December 2020.
In other economic news on Thursday, the US trade deficit in goods and services decreased to $79.6 billion in June, down $5.3 billion and slightly lower than the estimate for $80 billion.
The main indexes on Wall Street remained mixed after the data, with the Dow Jones Industrial Average down 52 points, or 0.2% at 32,760, while the S&P 500 was flat and the tech-heavy Nasdaq Composite added 0.3%.
9.50am: Proactive North America headlines:
WeWork Inc continues to lose money with net loss and negative EBITDA, but narrows gap
Playgon Games reveals record player betting turnover of C$82M for July 2022
Deepspatial says it will showcase AI platform for law enforcement at Bureau of Police Research and Development conference in India
Perk Labs receives certification from Deliverect for point-of-sale integration
American Resources boosts ReElement Technologies division with new hires and promotes Peterson to COO
Cypress Development reports impressive drill results from its Clayton Valley Lithium project in Nevada
ACME Lithium kicks off phase 2 field work at Fish Lake Valley project in Nevada
Revolve hails successful completion of BLM variance process for Parker Solar and Storage project
Trees Corporation reports record monthly system-wide sales in July ahead of 2Q earnings
Evergold Corp updates exploration model for Holy Cross property in British Columbia ahead of drilling program in October
Therma Bright updates on progress of applications to FDA and Health Canada for its AcuVid COVID-19 rapid antigen saliva test
Great Atlantic Resources begins 2022 exploration program at wholly-owned Pilley’s Island property
Information Services Corporation reports improved 2Q results; raises full-year revenue and net income guidance
Great Panther Mining continues to focus on operational efficiencies at its Brazil gold mine as it posts Q2 results
Cordoba Minerals appoints economic geologist Dr Diane Nicolson as an independent director
Kontrol Technologies says it intends to implement a new Normal Course Issuer Bid (NCIB) program to buy back its common shares
Medallion Resources receives proceeds of US1.0M from the issuance of US$1.15M principal amount unsecured promissory notes
9.35am: All eyes on jobs data
US stocks opened mixed as investor focus has turned to the latest non-farm payrolls data due out on Friday.
Just after the open, the Dow Jones Industrial Average had shed 66 points at 32,746 points and the S&P 500 was down 2 points at 4,153 points.
The tech-heavy Nasdaq Composite, on the other hand, had gained 30 points at 12,699 points.
US-listed shares of Alibaba Group Holding Limited were up about 3% at the open after the Chinese e-commerce giant posted a 1Q revenue beat but flat year-over-year growth.
Forex.com market analyst Matt Weller wrote in a note that the leading indicators were pointing to a slightly below expectations non-farm payrolls data reading tomorrow, with headline job growth expected to be somewhere in the 150,000 to 250,000 range.
“If the report meets these expectations, it would be the slowest net jobs growth since December 2020’s outright decline of 227,000 jobs,” he wrote.
Weller also noted with other measures of inflation still elevated that traders would be looking for signs that wages were continuing to rise, with average hourly earnings projected to rise by 0.3% month-over-month in line with the previous month’s reading.
6.30am: Busy day ahead
US stocks were expected to open slightly higher on Thursday with attention turning to the US non-farm payrolls data due out tomorrow for clues on how the economy is faring amid rising prices and interest rates.
Futures for the Dow Jones Industrial Average were trading 0.1% higher pre-market, while those for the broader S&P 500 index gained 0.2%, and contracts for the tech-laden Nasdaq-100 rose 0.3%.
On Wednesday, US stocks got a lift from stronger services sector data from the Institute for Supply Management and some of that cheer is expected to be felt again, especially if economic data continues to show strength. Investors will also be looking to further comments from US rate-setters for direction.
“We’re seeing a little more positivity in the markets after another lively week and there’s still plenty to come as we get closer to the weekend,” said Craig Erlam, Senior Market Analyst, UK & EMEA, OANDA. “Fed officials have been out in force again; this time with a focus on market expectations of a swift reversal from rate hikes to cuts early next year.”
Whether those expectations are reasonable will be borne out by upcoming data such as the latest weekly jobless claims today, adding focus to the pivotal non-farm payrolls data for July due out on Friday.
Saxo Bank’s Head of Equity Strategy, Peter Garnry, meanwhile, noted that Cleveland Fed President Loretta Mester‘s comments on Wednesday that inflation may not have peaked have had an impact on markets.
“Mester’s comments yesterday lifted the entire US yield curve which surprisingly did little damage to equities with S&P 500 futures closing just below the 4,100 level and already today US equity futures are moving higher again suggesting momentum maybe has more leg,” he said.
Mester is due to speak again today and her words will likely be scrutinised further. The big question is whether inflation has indeed peaked and how many more rate increases would be needed to keep a lid on price pressures.
The ongoing earnings season will also dictate market direction with the likes of ConocoPhillips, Eli Lilly, Kellogg, Alibaba due to report earnings today.
Elsewhere, US House Speaker Nancy Pelosi’s visit to Taiwan will likely speed up deglobalization in the coming years, causing a huge adjustment to the global economy, warned Saxo’s Garnry.
“Immediately after the visit China forced CATL( Contemporary Amperex Technology Co. Ltd.) to halt its $5bn battery plant in North America which was supposed to supply Tesla and Ford in their EV push. In consumer electronics, Motorola has pulled the launch of two products in the developed world and China has halted export of natural sand to Taiwan which is a key ingredient for semiconductor manufacturing,” he said. “These moves show that China is retaliating and it wants to impact the US where it hurts.”
These developments suggest worries about pressure prices are here to stay, he added.
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