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Trump Reignites Trade War, July Jobs Report Today

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On Thursday, President Trump posted another tweet on tariffs! He reignited the trade war with China.

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Trump reignited the trade war

At the G20 summit, the US and China agreed to negotiate on the trade talks. On Thursday, President Trump announced an additional 10% tariff on the remaining $300 billion goods and products coming from China. The new tariffs will be effective on September 1.

Trump’s tweet impacted stocks

On Wednesday, the markets already saw a downfall after the Fed announced rate cut. President Trump lashed out at the Fed. He said that the market expected the Fed to announce the beginning of a lengthy and aggressive rate-cutting cycle. In another tweet, President Trump mentioned that he saved the US economy from the “A Great Recession.”

President Trump reignited the trade talks in May when he announced the tariffs on China. As a result, tech stocks fell in May. The tech sector has the most business in China. However, markets ignored the concerns and rebounded in June. The markets were optimistic about a rate cut, a strong June jobs report, and the second-quarter earnings season.

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Markets reacted to the tariff

Tech stocks including Advanced Micro Devices (AMD), Micron Technology (MU), Intel (INTC), and Apple (AAPL) fell 1.9%, 2.6%, 1.9%, and 2.1 on Thursday. In contrast, Microsoft (MSFT) rose 1.3%. The S&P 500 Index fell 0.90%, while the Nasdaq Composite Index fell 0.78%. The Dow Jones closed with a loss of 1.0% on Thursday.

Auto stocks including Tesla (TSLA), Ford (F), and General Motors (GM) fell 3.2%, 2.3%, and 0.47% on Thursday. Auto stocks depend on the Chinese market.

What to expect from the July jobs report 

Amid these Trump-induced trade concerns and earnings season, the July jobs report will be released at 8:30 AM ET on Friday. According to the expectations, the July jobs report will continue to show strength in the labor market despite ongoing headwinds. Yahoo Finance reported that consensus economists expect the jobs report to show the following figures, according to Bloomberg estimates.

  • The change in non-farm payrolls will likely increase to 165,000 compared to June’s increase of 224,000.
  • The unemployment rate will be 3.6% compared to 3.7% in June.
  • The average hourly earnings will likely be constant at 0.2%.

Investors should also watch the labor participation rate in the July jobs report. The rate remained constant in April and May at 62.8%. However, the rate rose to 62.9% in June. On Wednesday, the ADP National Employment Report said that the US added 156,000 private payrolls in July, which was better than expected.

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Consumer confidence is high

Consumer confidence rebounded in July to the highest level in 2019, according to data released on Tuesday. Consumers ignored trade concerns. They have a positive outlook on the economy and the labor market for the second half of 2019. The consumer confidence survey showed that consumers’ appraisal of the job market also looked constructive. The consumers who said that jobs are “plentiful” rose from 44.0% to 46.2% in July.

Ferrari’s earnings  

Ferrari (RACE) will post its second-quarter earnings on Friday. The stock has risen 1.1% before its earnings. Will a strong July jobs report and other earnings releasing Friday help revive the stock market?

Stay tuned with us today to learn more about July jobs report and other earnings releases on Friday.

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