Premarket: Apple is red -- Updated with jobs report

apple premarket red 8-5-22From the Wall Street Journal’s "Stock Futures Waver Ahead of Jobs Data" posted early Friday:

U.S. stock futures were little changed ahead of employment figures that will be closely watched for clues about the impacts of the Federal Reserve’s interest-rate rises on the broader economy.

Economists estimate that U.S. employers added jobs at a robust pace in July, but fewer than in June, adding to signs of slowing U.S. economic growth. Figures are due at 8:30 a.m. ET.

The labor market has been a key source of economic strength. Even if growth is slowing, a strong labor market could keep the economy out of recession territory. Employment typically falls during recessions as companies lay off workers and stop hiring until the outlook improves...

“There have been some signs employment has started to weaken slightly, but compared with all the other indicators, employment’s been really strong, and that’s given the Fed comfort to push ahead with interest-rate increases,” said Altaf Kassam, head of investment strategy for Europe, the Middle East and Africa at State Street Global Advisors.

A weaker labor market “will get them off the aggressive schedule they’ve set themselves,” he said.

Charts: Yahoo!Finance sees a bearish relative-strength-index (RSI) pattern. Max pain moves up $5 to $162.50 with a call mountain at $170 (also up $5).

UPDATE: Far from weakening, the U.S. economy added 528,000 jobs in July, driving shares down as investors anticipated further inflation-fighting rate hikes.

7 Comments

  1. Gregg Thurman said:
    I’ve never really understood the Fed’s rate hikes.

    The primary drivers of current inflation is outside the core rate, namely food and energy.

    Inflation in these two categories are a direct result of the Russo/Ukraine war. Russian oil in embargoed and the Ukraine can’t ship its wheat. Both are major world suppliers in their respective categories.

    The EU has been slowly finding alternatives to Russian oil, and the Ukraine is now shipping its wheat. These two factors are going to remove a LOT of inflationary pressure, more than will central bank monetary policy, and it will happen faster than monetary policy.

    Wheat futures are now selling at pre-war prices and falling. Oil futures are back to pre-war levels and in a two month decline trend. As the EU’s dependence on Russian oil/gas wanes those prices will decline further.

    Today’s jobs report shows that our economy is still growing, albeit at a slower rate. These are not recessionary indicators. I think the Fed should tread lightly with future rate increases. IMO the next rate increase should be no more than 50 basis points, with future rate increases being lower still.

    1
    August 5, 2022
  2. Steven Philips said:
    Also this morning Sinema’s change to the “inflation” bill would change part of the taxation to 1% on stock buybacks.

    0
    August 5, 2022

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