Dow falls after strong jobs report weakens the case for lower rates - CNN

The Dow was down just 35 points in mid-afternoon trading Friday after the government reported that 224,000 jobs were added last month — much better than expected. The Dow was down more than 200 points at its lowest level of the day.

The S&P 500 and Nasdaq each fell about 0.2%. All three indexes closed at record highs in an abbreviated trading session Wednesday. US markets were closed Thursday for July 4th. Stocks are enjoying a solid week too. The Dow and S&P 500 are each up more than 1% while the Nasdaq has gained more than 1.5%.

"This month's strong jobs report is certainly uplifting after we saw such disappointing numbers in May, and shows that the labor market is still has plenty of fight left," said Steve Rick, chief economist at CUNA Mutual Group, in a report Friday morning. "The economy is still healthy right now, despite some concern rising from shakier, more volatile markets."

But the big rebound in jobs growth — only 72,000 jobs were added in May according to revised figures released Friday — may complicate the picture for the Fed.

As recently as June 20, investors were pricing in a nearly 40% chance of an aggressive half-point rate cut at the Fed's next meeting on July 31, according to futures traded on the Chicago Mercantile Exchange.

After Friday's job report, the likelihood of a half-point cut fell all the way to 5%.

"The plot thickens with respect to the Federal Reserve's decision on interest rates at the end of this month," said Mark Hamrick, senior economic analyst with Bankrate.com, in a report.

Still, it is highly unlikely that the Fed will just sit tight at its next meeting. Investors are still worried about the US multi-front trade war and the impact that's having on China's and Europe's economies.

Hamrick said the Fed may "still attempt to mollify investors by putting a modest, so-called insurance cut in place. The array of headwinds associated with slowing global growth, trade disputes and tariffs haven't gone away."

Investors still think there is a 100% chance of at least a quarter-point rate cut by the Fed on July 31.

But the decreased likelihood for a big rate cut boosted bank stocks, as higher interest rates boost the profitability of banks' lending businesses.

Shares of Bank of America (BAC), Citigroup (C), Goldman Sachs (GS), JPMorgan Chase (JPM), Morgan Stanley (MS) and even troubled Wells Fargo (WFC) were all higher.

Bond yields spiked as well following the jobs report. The rate for the benchmark 10-year US Treasury rose back above 2%. The US dollar also rallied, which it tends to do after solid domestic economic reports.

Gold prices, which have moved higher recently in part due to expectations of a slower global economy, fell Friday.

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https://www.cnn.com/2019/07/05/investing/dow-stock-market-today-jobs/index.html

2019-07-05 17:49:00Z
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US Stock futures lower after jobs report - Fox Business

U.S. equity futures are trading lower after the better than expected monthly nonfarm jobs report.

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Wall Street reopens to trading on Friday following a record setting session and the July 4th holiday.

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The June employment report reported 224,000 new nonfarm jobs were created, topping the estimate for 160,000.

The May numbers were revised lower by 3,000 to 72,000.

U.S. stocks traded higher on Wednesday lifting the Dow Jones Industrials, the S&P 500 and the Nasdaq to new records.

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Dow Jones Industrial futures are lower by 0.2 percent, , S&P 500 futures are down 0.3 percent and Nasdaq futures are lower by 0.4 percent.

In Asian markets on Friday, China's Shanghai Composite added 0.2 percent on the day and 1.1 percent for the week. Hong Kong's Hang Seng traded lower by 0.1 percent, but up 0.8 percent for the week. Japan's Nikkei rose by 0.2 percent and added 2.2 percent for a fifth straight week of gains.

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In Europe, London's FTSE slipped 0.4 percent, Germany's DAX is down 0.5 percent and France's CAC was down 0.3 percent.

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2019-07-05 12:50:16Z
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Futures slightly lower before jobs data By Reuters - Investing.com

By Medha Singh

(Reuters) - U.S. stock futures edged lower, on Friday, as investors awaited the monthly jobs data, which could offer clues on the Federal Reserve's move on interest rates.

Nonfarm payrolls data from the Labor Department is likely to show an increase by 160,000 jobs last month after rising by only 75,000 in May, according to a Reuters survey of economists. The data is due at 8:30 a.m ET (1230 GMT).

The likely rebound in U.S. job growth and expectations of a pick up in wage gains would probably not be enough to discourage the Fed from cutting interest rates this month amid growing evidence the economy is slowing.

A spate of weak economic data on Wednesday raised hopes of an interest rate cut and helped the Wall Street's main indexes clinch record closing highs.

"It appears that, unless the report shows a radically lower figure – as happened in May – markets could accept a broadly solid jobs report as confirmation that the July FOMC meeting will result in only 25 basis point of easing," Chris Turner, global head of strategy at ING, said.

Traders fully expect the U.S. central bank to lower borrowing costs by at least a quarter point at its policy meeting on July 30-31 and also see a 23% chance of a 50-basis-point reduction.

A protracted U.S.-China trade war is also seen as a reason behind the Fed's dovish stance, although a trade truce reached between the United States and China and their return to talks last week have tempered bets of a half-point cut.

At 6:52 a.m. ET, Dow e-minis () were down 35 points, or 0.13%. S&P 500 e-minis () were down 4.75 points, or 0.16% and Nasdaq 100 e-minis () were down 15 points, or 0.19%.

Trading volumes could be thin at the end of holiday-shortened week as markets were shut on Thursday for Independence Day holiday.

Among stocks, Qualcomm Inc (O:) fell 2.9% in premarket trade, with Intel Corp (O:) and Advanced Micro Devices Inc (O:) also trading lower, after Samsung Electronics Co Ltd (KS:) forecast a steep plunge in its second-quarter operating profit due to a supply glut and rising tariffs hitting global demand for electronics.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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2019-07-05 11:46:00Z
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BMW chief executive Harald Krueger is stepping down - CNN

The luxury car company announced Friday that Harald Krueger is standing down after four years as CEO. The company's board will address the matter of succession during a meeting this month.

Krueger has worked at the German carmaker for nearly three decades. He thanked employees for their efforts in a statement but said he was leaving to "pursue new professional endeavors."

"Over the last years, the automotive industry has been shaped by enormous changes, which have brought about more transformation than in the previous 30 years," said Krueger.

The pace of change has presented huge new challenges for global carmakers, and BMW is no exception. The company's profit shrunk in the first quarter, in part because of an expected fine, and its automotive division posted a loss.

BMW last month set a goal of having 25 electrified models in 2023, two years ahead of schedule. It said it expects sales of electrified vehicles to double by 2021.

Yet the company has so far taken a cautious approach to fully electric cars, instead focusing on plug-in hybrids.

David Bailey, a professor at the Birmingham Business School, said that BMW needs to accelerate its move into new technologies.

"[Krueger has] done a very good job in recent years, but BMW faces some very big challenges going ahead," said Bailey. "They felt the needed to bring in somebody new given the scale of the challenge."

BMW (BMWYY) and Daimler (DDAIF), which compete hard in the luxury market, announced earlier this year that they would form a strategic partnership focused on highly-automated and autonomous driving.

The companies are also investing $1 billion in a new venture to develop services including ride-sharing and charging systems for electric cars.

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https://www.cnn.com/2019/07/05/business/bmw-ceo-harald-krueger/index.html

2019-07-05 12:20:00Z
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Stocks - Futures Fall After Fourth of July Holiday; Jobs Report Ahead - Investing.com

© Reuters.

Investing.com - U.S. futures were lower on Friday as traders returned from the Fourth of July holiday to await the monthly employment report, something broadly expected to cement an interest rate cut from the Federal Reserve later in July.

fell 14 points or 0.2% by 6:40 AM ET (10:40 GMT), while slipped 29 points or 0.1% and inched down 4 points or 0.2%.

The is out at 8:30 AM ET (12:30 GMT) and analysts expect the creation of 160,000 jobs, up from 75,000 in May but still comfortably below the average monthly gain in 2018.

"There is a clear sense that the risks of making a policy error, by over-stimulating demand and creating inflation, appear to be low at this juncture," said Mark Dowding, chief investment officer with BlueBay Asset Management. "Therefore, it may require a jobs report adding more than 225k payrolls, plus evidence of higher wages and consumer prices, in order for the Fed to stand pat."

Markets have already priced in a cut of 25 basis points in July, with a 60% chance of three cuts by the end of the year.

Dowding noted that the political pressure to ease policy from President Donald Trump could also make it harder for the Fed to keep rates where they are.

Semiconductor makers were under pressure in premarket trading after Korean giant Samsung (KS:) said it expects second-quarter profit to have fallen dramatically. Micron Technology (NASDAQ:) fell 0.5%, while Qualcomm (NASDAQ:) was down 2.7% and Nvidia (NASDAQ:) down 0.2%

Tesla (NASDAQ:) rose 0.3% in premarket trading, while BMW (OTC:) ADRs, which hit a six-week high on Wednesday, were also in focus after CEO Harald Kruger announced his resignation amid reports that the company's supervisory board had lost confidence in him.

Amazon.com (NASDAQ:) is also in the spotlight, after the U.K.’s Competition and Markets Authority told the e-commerce giant to pause its integration with meal delivery service Deliveroo, while it decides whether or not to launch an investigation into a possible competition breach.

In commodities, fell 0.8% to $56.85 a barrel, while were down 0.3% to $1,416.55 a troy ounce. The , which measures the greenback against a basket of six major currencies, inched up 0.2% to 96.530.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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2019-07-05 11:29:00Z
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BMW chief executive Harald Krueger is stepping down - CNN

The luxury car company announced Friday that Harald Krueger is standing down after four years as CEO. The company's board will address the matter of succession during a meeting this month.

Krueger has worked at the German carmaker for nearly three decades. He thanked employees for their efforts in a statement but said he was leaving to "pursue new professional endeavors."

"Over the last years, the automotive industry has been shaped by enormous changes, which have brought about more transformation than in the previous 30 years," said Krueger.

The pace of change has presented new huge challenges for global carmakers, and BMW is no exception. The company's profit shrunk in the first quarter, and its automotive division posted a loss.

BMW (BMWYY) and Daimler (DDAIF), which compete hard in the luxury market, announced earlier this year that they would form a strategic partnership focused on highly-automated and autonomous driving.

The companies are also investing $1 billion in a new venture to develop services including ride-sharing and charging systems for electric cars.

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https://www.cnn.com/2019/07/05/business/bmw-ceo-harald-krueger/index.html

2019-07-05 11:03:00Z
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German factory orders sink on drop in foreign demand - Financial Times

A key gauge of the health of Germany’s manufacturing industry sank by far more than expected in May, amid a steep drop-off in foreign demand that is hitting factories across the eurozone and raising expectations that the European Central Bank will revive its crisis-era stimulus.

Manufacturing orders in Germany dropped 2.2 per cent month-on-month in May, and were down 8.6 per cent from the same month in 2018. A Reuters poll of economists had forecast a fall of 0.1 per cent.

The publication of the data sparked a fresh fall in government borrowing costs as markets priced in the likelihood of more monetary easing from the ECB. Germany’s 10-year Bund yield traded near historic lows of minus 0.4 per cent on Friday, after the release of the data.

The global trade slowdown has dealt a severe blow to manufacturers in the single currency area, with Germany’s €1.6tn export machine being hit particularly hard. A poll of purchasing managers published this week suggested that levels of activity had continued to shrink in June.

“Today’s figures do not bode well for the short-term prospects for the German economy,” said Ralph Solveen, an economist at Commerzbank, who added that the report underlines “our expectation that the German economy shrank in the second quarter and that hopes of a noticeable improvement in the third are dwindling”.

The scale and duration of the problems have raised fears among policymakers that the woes of the region’s factories will begin to infect other parts of the economy, including the dominant services sector that is more reliant on domestic demand.

The wider economy has held up well in the face of the manufacturing slowdown; unemployment in Europe’s largest economy is close to post-reunification lows. But there are signs the German labour market is weakening, although the evidence is inconclusive.

Any increase in unemployment is likely to weigh on consumer spending.

Departing ECB president Mario Draghi is widely expected to launch fresh policy stimulus, including interest rate cuts and further bond purchases, during his final months in office. The bank’s governing council next meets on July 25.

“German factory orders have brought us closer to ECB action at the July meeting,” said Carsten Brzeski, economist at ING. “If industrial data next week are equally dreadful, it is hard to see the ECB not acting. Mr Draghi increased expectations so strongly that no reaction to another set of disappointing data would be counter-effective.”

In a sign of how far investors’ expectations of central bank action have shifted, the market value of negative-yielding debt globally this week reached a record high of $13tn, according to data from Barclays.

The figure represents a dramatic increase from $8.3tn at the end of last year. The negative yield means that investors who purchase the Bunds and hold them to maturity will receive less in repayment and regular coupon payments than their initial investment.

Germany’s factory sector has been among the hardest hit by the sharp slowdown in global trade stoked by the US-China trade war. Sluggish growth across some of its major trading partners, such as Turkey, has also weighed on what was until recently the eurozone’s economic powerhouse.

Foreign orders at German manufacturers slumped 4.3 per cent in May, on a month-over-month basis, according to surveys of purchasing managers. Orders from the eurozone were off 1.7 per cent, and those outside the bloc tumbled 5.7 per cent. Domestic orders rose 0.7 per cent. 

“Manufacturers have, at least according to the PMIs, been able to maintain production growth in excess of the flow of new orders recently by clearing work backlogs,” said Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics. “But that can’t go on indefinitely.”

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2019-07-05 08:03:00Z
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