The U.S. jobs report for July was much better than expected, suggesting that the Federal Reserve may raise interest rates further, and U.S. stocks fell on Friday (5th).
The Dow fell 229 points or 0.7% in early trade, the S&P 500 fell 0.97%, the Nasdaq fell 1.27% and the Philadelphia Semiconductor Index fell 1.62%.
The report showed that the US non-farm payrolls increased by 528,000 in July, and the unemployment rate was 3.5%, far better than expected. The estimate is for an increase of 258,000, and the unemployment rate is 3.6%. Wage growth also soared, with average earnings up 0.5% for the month and 5.2% from a year earlier.
Markets had expected slowing job growth to slow the Fed’s rate hikes, but the report showed the labor market was still hot, with currency markets now pricing in a 3-yard rate hike in September.
Tensions between the U.S. and China also continue to cloud the outlook and increase uncertainty. After U.S. House Speaker Nancy Pelosi visited Taiwan this week, China announced it would halt cooperation with the U.S. in a number of areas, including climate change and defense-job-level talks.
This follows a generally positive corporate earnings season, which sent the S&P 500 to a modest 0.5% gain until Friday this week.
Oil markets have now given back all the gains from Russia’s invasion of Ukraine, with fears intensifying after the Bank of England warned of recession.
As of 21:00 on Friday, Taipei time: Dow Jones fell 229.2 points or 0.70% to 32497.62 points, Nasdaq fell 162.17 points or 1.27% to 12558.41 points, and S&P 500 fell 40.22 points or 0.97% to temporarily report TSMC ADR rose 0.96% to $89.22 per share, the 10-year U.S. Treasury yield rose 11 basis points to 2.80%, and New York Light crude oil fell 0.40% to 88.19 per barrel U.S. dollar Brent crude fell 0.37% to $93.77 a barrel Gold fell 1.1% to $1786.20 an ounce The U.S. dollar index rose 0.96% to 106.71 Stocks in focus:
DoorDash (DASH-US) rose 4.67% to $84.87
DoorDash, an online food delivery platform, reported a loss of 72 cents a share in the second quarter, compared with a loss of 30 cents a share in the same period last year. Revenue was $1.61 billion, up 30% year over year, beating expectations of $1.52 billion. Market orders totaled $13.08 billion in a single quarter, up 25% year-on-year and higher than analysts’ estimates of $12.72 billion.
For the full fiscal year, DoorDash expects adjusted EBITDA to be in the range of $200 million to $500 million, up from expectations of $237.4 million.
Apple (AAPL-US) fell 0.79% to $164.27
Japanese media reported that Apple has asked suppliers to ensure that goods shipped from Taiwan to mainland China comply with Chinese customs regulations to avoid them being scrutinized.
U.S.-China trade tensions escalated after U.S. House Speaker Nancy Pelosi and a congressional delegation visited Taiwan. Apple told suppliers that China has begun enforcing a longstanding rule that parts made in Taiwan must be labelled “Made in Taiwan,” or “Taipei,” China. .
In response to media reports that Chinese customs officials are reviewing shipments to Pegatron’s Chinese factories, Apple iPhone assembler Pegatron (4938-TW) said its factories in mainland China were operating normally.
Tesla (TSLA-US) fell 1.96% to $907.71
At the 2022 shareholder meeting, investors told CEO Elon Musk that “we are past the high point of inflation” and could see a “relatively mild recession” lasting about 18 months.
His argument is based on the commodity prices Tesla is required to pay for the materials and goods it needs to make its electric cars.
Musk was also asked how Tesla will use its funds in the coming years. The CEO said Tesla is focusing on increasing capital spending and R&D spending “as fast as possible without wasting it.” “Share buybacks are also possible,” he added, depending on Tesla’s future cash flow.
Daily key economic data: US non-farm payrolls increased by 528,000 in July, expected 250,000, the previous value of 398,000 US unemployment rate in July 3.5%, expected 3.6%, the previous value of 3.6% US July average hourly average Wages increased by 0.5% month-on-month, expected 0.3%, and the previous value was 0.4%. The average hourly wage in the United States in July increased by 5.2% year-on-year, compared with the expected 4.9% and the previous value of 5.2%. Wall Street Analysis:
Paul Nolte, a portfolio manager at Kingsview Asset Management, said this week’s comments from Fed officials that it’s too early to exit austerity policy is in line with the report’s data. The job market continues to be much hotter than historically normal, so there is a case for the Fed to keep raising rates, which is what keeps the market nervous.
Neil Dutta, director of economics at Renaissance Macro Research, agreed that the jobs report was in line with inflation. The Fed needs to be more aggressive in raising rates, making a hard landing more likely.