Daily Markets: June Jobs Report – Bullish or Bearish?


The big picture today

Asia-Pacific equity indices ended today’s session higher across the board except China’s Shanghai Composite which ended the day down 0.25%. Japan’s Nikkei gained 0.10% despite news that former Prime Minister Abe Shinzo had been assassinated at a campaign event. Hong Kong’s Hang Seng gained 0.36%, India’s Sensex rose 0.56%, Australia’s ASX All Ordinaries rose 0.59% and South Korea’s KOSPI gained 0.70%. Taiwan’s TAIEX led the way, up 0.89% on the day.

By midday, major European equity indices are up across the board and US futures are pointing to a mixed open later this morning as investors await today’s unemployment release. How this report compares to consensus expectations will fuel the recession or inflation narrative that has gripped equity markets.

Data download

International economy

Last night saw the release of Japanese consumption and income figures for the month of May, with annual consumption contracting by 0.50%, a slower rate than the previous month’s 1.7% drop and the annual revenue also slowing the pace of decline to -2.7% from the previous report – 3.5%.

Domestical economy

8:30 a.m. ET will see a slew of jobs-related releases, as the June unemployment rate is expected to hold steady at 3.6%, though additions to the nonfarm and private nonfarm payrolls are expected to take a big hit. The consensus forecast for nonfarm and private nonfarm payroll additions in June are 276,500 and 240,000, respectively, down from 390,000 and 333,000 in May. Inflation watchers will focus on early June hourly year-on-year earnings growths, which are expected to decline slightly to 5.1% from the previous 5.2%. The June manufacturing payroll is estimated to rise to 25,000 from the 18,000 previously reported.

10:00 a.m. ET will see the latest May wholesale stocks released with expectations unchanged from preliminary reports of 2.0% growth. Although this figure is lower than the last updates, stocks have been accumulating at a rapid rate and have been showing higher highs and lows roughly since the start of 2021 for about a few months, so it is unclear when this metric will start rolling.

3:00 p.m. ET will see May numbers for consumer credit which are expected to return to a more normalized level of $28.5 billion from the previous update of $38.1 billion. This figure is still slightly high by historical standards of around $20 billion, but more manageable than the $47.3 billion peak recorded in March.

Markets

Markets rallied yesterday as all sectors closed except utilities which came under slight pressure, down 0.10%. Energy, consumer discretionary and technology names led the way in that order and saw the Dow Jones gain 1.12%, the S&P 500 up 1.50%, the Russell 2000 up 1. .69% and the NASDAQ Composite add 2.28% on the day.

Here’s how the major market indicators stack up since the start of the year:

  • Dow Jones Industrial Average: -13.63%
  • S&P 500: -18.12%
  • Nasdaq compound: -25.72%
  • Russell 2000: -19.02%
  • Bitcoin (USD-BTC): -53.63%
  • Ether (ETH-USD): -66.58%

Stocks to Watch

Prior to the start of trading in U.S.-listed stocks, no company is expected to release its latest quarterly results, but given that we are in a quiet period for companies, readers should be on the lookout for advance announcements of profits.

Taiwan Semiconductor (TSM) announced that its net revenue for June was approximately NT$175.87 billion, down 5.3% from the previous month but up 18.5% year-on-year. The company issued an upward guidance for its June quarter, with revenue now expected at NT$534.14 billion versus consensus of $519.86 billion.

Acer (ACEYY) announced that revenue from its desktop PC business increased 9.3% in June, 2.9% in 2Q 2022 and 15.4% in the first half of 2022, while revenue of its Gaming business increased by 25.7% in June, decreased by 12.3% in 2Q 2022 and increased by 4.9% during the first half of 2022.

Costco (COST) announced its June comparable sales which, excluding the impact of gas price and exchange rate fluctuations, increased by 13.0%. Comparable sales in the United States on an adjusted basis rose 13.2% for the month, while comparable adjusted sales in Canada climbed 3.7%. June e-Commerce comparable sales on an adjusted basis of +8.3%. The company noted that its June figures had an extra shopping day in the United States compared to last year, due to the timing of Independence Day. This benefited the company’s total and comparable sales by approximately 2%, and total and comparable sales in the United States by approximately 3%.

Nu Skin (NUS) issued a lower revenue forecast for its June quarter. The company now sees that revenue in the range of $557-562 million compared to the consensus of $604.7 million. According to the company, its “revenues were lower than expected due to the extension of COVID-related factors in mainland China, distractions in the EMEA region related to the ongoing conflict in Russia and Ukraine, and the global economic slowdown. which is particularly difficult for developing regions such as Latin America. America.”

AI Lending Market Beginner (UPST) also issued a lower guidance for its June quarter, with revenue now expected at around $228 million compared to the consensus of $297.6 million and the company’s earlier guidance of $295-305 million. . Revenue was negatively impacted by two factors – its funding market is constrained, largely due to macroeconomic concerns among lenders and capital market participants. Second, during the quarter, Upstart converted loans from its balance sheet to cash, “which, given rapidly rising rates, negatively impacted our revenue.”

Mastercard (MA) The June SpendingPulse report showed US non-automotive consumer spending grew +9.5% year-on-year; retail sales excluding autos and petrol increased by +6.1% over one year. Excluding auto and gas, in-store spending rose +11.7% YoY in June, while e-commerce grew +1.1% YoY, according to the report.

Tesla (TSLA) achieved its highest monthly sales of 78,906 Chinese-made vehicles in June, up 138% year on year and around 145% month on month and well ahead of last December’s record high of 70,847 vehicles.

Twitter (TWTR) shared, he laid off 30% of his talent acquisition team. Meanwhile, The Washington Post reports that Elon Musk’s deal to buy the company is in serious jeopardy “because Musk’s camp has concluded that Twitter’s numbers on spam accounts are not verifiable.”

GameStop (GME) terminated the employment of Chief Financial Officer Michael Recupero, sending the video game retailer’s shares into aftermarket trading last night.

TechCrunch reports Argo AI, the self-driving vehicle technology startup backed by Ford Motor (F) and Volkswagen (VLKAY) has joined the ranks of tech companies cutting its workforce, laying off about 150 people and slowing its pace of hiring,

Reuters reports that a tentative deal for private-sector Qatar Airways to purchase up to 50 Boeing (BA) The 737 MAX jets are obsolete.

IPOs

As of now, no IPO is expected to be priced this week. Readers who want to dig deeper into the schedule of upcoming IPOs should visit Nasdaq’s Latest and Upcoming IPOs page.

After today’s market close

No company is expected to release quarterly results after shares halt trading today. Those interested in learning more about which companies release their reports when head to the Nasdaq earnings calendar.

on the horizon

Monday July 11

  • Italy: Retail sales – May
  • United States: BC Employment Trends Index – June

tuesday july 12

  • Japan: producer price index – June
  • Germany: Current ZEW Conditions, Economic Sentiment – ​​July
  • Eurozone: ZEW Economic Sentiment – July
  • United States: NFIB Small Business Optimism Index – June
  • OPEC monthly report

Wednesday July 13

  • China: Import/Export – June
  • United Kingdom: construction output, industrial output, manufacturing output – May
  • Germany: consumer price index – June
  • Euro zone: Industrial production – May
  • United States: Consumer Price Index – June

Thursday July 14

  • Japan: industrial production and capacity utilization – May
  • United States: Initial and Continuing Weekly Unemployment Claims
  • United States: producer price index – June
  • United States: Fed Beige Book

friday july 15

  • China: house prices, industrial production, retail sales – June
  • China: China Thomson Reuters IPSOS PCSI – July
  • China: 2Q 2022 GDP
  • United Kingdom: car registrations – June
  • Germany: car registrations – June
  • Italy: Consumer Price Index – June
  • United States: Retail sales – June
  • United States: Empire Manufacturing Index – July
  • United States: industrial production and capacity utilization – June
  • United States: Business inventories – May
  • United States: Michigan Consumer Sentiment Index – July

Thought of the day

“Before I can live with other people, I have to live with myself.” ~ Atticus Finch

Disclosures

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.
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