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Global Markets: Wall Street muted on jobs growth as taper, Delta fears weigh

Stock MarketsAug 06, 2021 04:20PM ET
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2/2 © Reuters. FILE PHOTO: Investors sit in front of a board showing stock information at a brokerage house on the first day of trade in China since the Lunar New Year, in Hangzhou, Zhejiang province, China February 3, 2020. China Daily via REUTERS 2/2

By Lawrence Delevingne

BOSTON (Reuters) - A positive jobs report drove U.S. stocks modestly higher Friday, but a parallel rise in Treasury yields signaled a downside: the good news could push the Federal Reserve to curtail its massive stimulus policies faster then expected.

Nonfarm payrolls increased by 943,000 in July after rising 938,000 in June, the Labor Department said in its closely watched employment report, pushing unemployment down to 5.4% and suggesting the economy maintained its strong momentum. Economists polled by Reuters had forecast payrolls increasing by 870,000 jobs.

"It's a number that's hard to say anything but positive things about," said Sameer Samana, a market strategist at Wells Fargo (NYSE:WFC) Investment Institute in St. Louis. "Especially with the Delta variant kind of perking up, it would be much more confidence-building for the market to have a very strong economy."

Still, stock gains were muted. The Dow Jones Industrial Average rose 144.39 points, or 0.41%, to 35,208.64, the S&P 500 gained 7.44 points, or 0.17%, to 4,436.54 and the Nasdaq Composite dropped 59.36 points, or 0.4%, to 14,835.76.

Some investors believe the robust jobs numbers could support the view that the Fed, faced with rising inflation and strong growth, may need to unwind its ultra-easy monetary policies sooner than expected. Such an outcome could push yields higher while denting growth stocks and other areas of the market.

"This good news brings pain for the bond market. The dollar will strengthen and yields will go up and that could cap stocks a bit," said Peter Cardillo, an economist with Spartan Capital Securities in New York.

Benchmark 10-year Treasury yields rose to 1.3019%, a week high after their U.S. close at 1.217% on Thursday. Yields have been under 2.0% since July 2019.

"We expect this to be the start of a sustained move higher in Treasury yields over the rest of the year," Mike Bell, a market strategist at J.P. Morgan Asset Management, said in an email.

Investors will now focus on the details of any taper. The Fed's annual meeting of central bankers in Jackson Hole, Wyoming, later this month is seen as offering clues to the Fed's thinking. There were already hints from policymakers this week that an interest rate increase could come in late 2022 or 2023 given the economic strength of the recovery so far.

Oil prices declined further on Friday, set for their biggest weekly loss since October after falls earlier in the week triggered by rising COVID-19 cases and a surprise build in U.S. crude stockpiles.

U.S. crude fell 1.46% to $68.08 per barrel and Brent was at $70.49, down 1.12% on the day.

The dollar's value relative to other currencies rose sharply on Friday, as the jobs report bolstered the case for faster U.S. policy tightening. The dollar index was last up about 0.528, or 0.57%, in late afternoon trading.

The stronger dollar and potential for higher yields hurt gold. Spot prices dropped 2.4% to $1,760.69 an ounce. U.S. gold futures fell 2.57% to $1,758.70 an ounce.

Bitcoin was up around 5% at $42,953, its highest price since May. Ether, the world's second largest cryptocurrency, rose to around $2927, a 4.3% gain, a day after a major software upgrade to its underlying blockchain.

Global Markets: Wall Street muted on jobs growth as taper, Delta fears weigh
 

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Comments (16)
Eloghosa Naomi
Eloghosa Naomi Aug 07, 2021 6:49PM ET
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Todd Gray
Todd Gray Aug 06, 2021 2:29PM ET
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The inflation pundits write about will start next year.
Todd Gray
Todd Gray Aug 06, 2021 2:27PM ET
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Low oil prices are the key to economic recovery. 1. Psychologically, low oil prices will induce people to think the entire economy is fine. That will lead people to spend what they've been saving, and money velocity would increase. People will buy new cars, and drive them long distances. They'd hop on planes and fly across the country, or to Europe. Business expenses would decrease, which would improve profitability, and that would create job vital growth. Low oil prices are a small sacrifice to gain a more robust economic recovery.
jason black
jason black Aug 06, 2021 2:07PM ET
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MSM propaganda makes zero sense anymore, no wonder why approval is at historic lows below 30%...here are two actual article titles both on the front page of this website at the exact same time: "S&P 500, Dow Remain Near Records as Cyclicals Gain on Stronger Jobs Report" "Wall Street muted on jobs growth as inflation, Delta fears weigh"
Evan Edwards
Evan Edwards Aug 06, 2021 12:16PM ET
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Yikes, its dropping pretty hard.
Evan Edwards
Evan Edwards Aug 06, 2021 12:15PM ET
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Yikes...
Ememobong Barnaby
Ememobong Barnaby Aug 06, 2021 7:46AM ET
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A weaker $$$ by evening. . All the rest of the news is just propaganda. buy Gold sl: 1798.18 tp: 1828
Long Hoang
Long Hoang Aug 06, 2021 7:46AM ET
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Lmao
Todd Gray
Todd Gray Aug 06, 2021 7:46AM ET
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there's gonna be a sharp drop to the s&p trend line, and a very strong bull run to astonishing new highs. that's my bet. but, I'm covered in the event I'm wrong.
Butt Sab
Butt Sab Aug 06, 2021 7:46AM ET
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check now 1760
Todd Gray
Todd Gray Aug 06, 2021 7:46AM ET
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plus, the dollars overvalued by .10 to .12 cents. I expect it to drop about the same time as the last bull run. then, I think the markets will crash, and the authentic reopening trade will begin; a two year bull cycle.
Waqar Aslam
Waqar Aslam Aug 06, 2021 7:43AM ET
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Whats the out come for GBPusd?
Whaling Trawler
Whaling Trawler Aug 06, 2021 3:56AM ET
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Fake
Ben Chod
Ben Chod Aug 06, 2021 2:54AM ET
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Bullish
Eudon Hickey
Eudon Hickey Aug 06, 2021 1:26AM ET
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They never isolated the virus. They also cant determine the variant(they guess), they also run 42 cycles for rhe PCR teat now, instead of the 24-28 in the past. This is all a distraction away from the USA 2020 election. Reuters is part of the deep state
Bronson Naab
Bronson Naab Aug 06, 2021 1:26AM ET
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Go plan your next insurrection attempt with your fellow traitors and keep your tinfoil hat glued on tight.
Tre Hsi
Tre Hsi Aug 06, 2021 1:26AM ET
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"This is all a distraction away from the USA 2020 election."  -- you are very easily distracted I see, maybe you need to see a doctor about your ADHD
Gerald Mejias Rod
Gerald Mejias Rod Aug 06, 2021 1:26AM ET
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What moderators LOL
YouTube Account
YouTube Account Aug 06, 2021 1:08AM ET
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Specifically, point to a source where they have isolated the delta variant. Also, specifically, what test are they using to detect the delta variant.
Mike Chen
Mike Chen Aug 05, 2021 11:24PM ET
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The market crashes when investors are fearless.?Are we one of them?
Jouni Matero
Jouni Aug 05, 2021 11:24PM ET
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You bet
Fernando Araujo
Fernando Araujo Aug 05, 2021 11:20PM ET
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China you love^^
Arub Baji
Arub Baji Aug 05, 2021 11:12PM ET
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I want a new variant ... and I want to be able to name it.  Or at least have a naming contest.  Winner gets a free vaccine shot.  LOL
divad mocihc
9divaD Aug 05, 2021 11:12PM ET
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The Ch!Com Variant it suffocates you with propaganda, surveillance, and cover-ups. Then you disappear.
divad mocihc
9divaD Aug 05, 2021 11:12PM ET
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I want my shot … No sinopac or sinopharma, or sinocr@p … give me the good stuff, pfizer omega
Rokib Mondol
Rokib Mondol Aug 05, 2021 11:06PM ET
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rokib
 
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