NFP beat market forecast at 255,000
The U.S. Bureau of Labor Statistics published the NFP (non-farm payroll) for July at a stable 255,000. This was well above the market’s forecast of 180,000, but slightly below 292,000 the previous month. Read What Are Investor Takeaways from the June Employment Reports? for a detailed analysis of the previous months’ NFP release. The rise in the ADP’s employment numbers coincided with the rise in NFP. For more on the ADP’s release on August 3, read Investor Takeaways from the July ADP Non-Farm Payrolls. Read “Can Investors Keep Forecasting the Final Non-Farm Payroll Correctly? for more on the correlation between the ADP NFP and the U.S. Bureau of Labor Statistics’ NFP.
As you can see in the above chart, the NFP steadied itself in July after two rather erratic numbers in June and April. This boosts the Fed’s views on the present employment scenario.
Brief look into how the various sectors fares
Professional business services and healthcare posted the maximum rise in jobs in July. They added 70,000 and 43,000 jobs, respectively. The financial activities also saw a rise in employment of 18,000 in July. Most of the sectors continued their uptrend from the previous month.
Mining was among the few sectors that recorded a fall in jobs. The mining industry lost 6,000 jobs in July—a total decline of 220,000 jobs since September 2014 when it peaked.
Impact on the market
Now, we’ll focus our attention on how the various related ETFs and stocks performed after the NFP release on August 5, 2016. The Technology Select Sector SPDR ETF (XLK) rose by 0.97%. The information sector had a strong rebound in June. It didn’t change in July. Related stocks like Apple (AAPL) and Microsoft (MSFT) rose by 1.5% and 0.99%, respectively. The Health Care Select Sector SPDR ETF (XLV) rose by 0.24%, while the SPDR S&P Metals & Mining ETF (XME) rose by 0.31% despite the report suggesting a contrasting turn of fortunes in the employment scenario in the two sectors.
Average hourly earnings saw a strong rise in July. Average hourly earnings rose by $0.08 to $25.69 in July. This marks an overall rise of 2.6% for the year.
In the last month the CSI 300 is down 11.5%, much more than US indices.
JCPenney (JCP) is slated to announce its results for the first quarter of fiscal 2019, which ended on May 4, on May 21.
The key point of contention in the US-China trade dispute is the large trade deficit the United States runs against China.
On May 16, the Labor Department reported jobless claims for last week. Initial jobless claims fell by 16,000 to 212,000 for the week ended May 11.
Jeffrey Gundlach recommended investors take advantage of the volatility in interest rates at the recent Sohn Conference.
Tesla (TSLA) has fallen 4.2% as of 11:55 AM EDT on May 17. While US equity markets opened in the red today, they've recouped their losses.