Fewer non-farm jobs were added than expected in July, as the unemployment rate rose. And the weather is partially to blame.
Hurricane Beryl caused power outages in the US Gulf Coast early in July, during which the Bureau of Labor Statistics conducted its household survey. And initial unemployment insurance claims in Texas during the week following the hurricane surged to 25,202 from 13,699 in the previous week.
The BLS said that Hurricane Beryl had “no discernible effect” on the July employment and unemployment data, and the response rates were within normal ranges. But some economists suspected potential impacts.
People not at work due to bad weather rose 11 times more than the average July from 1977 to 2019, Omair Sharif, founder of Inflation Insights, wrote in a note to clients. Those who switched from full-time to part-time work because of inclement weather also soared in July to 1.089 million, including agricultural jobs.
“This is another sign that the data were impacted by the weather, and in this case it likely affected hours, and potentially average hourly earnings as well,” he said.
The S&P 500 slumped 1.4% as a spate of bad data raised fears that the Federal Reserve might be too late in cutting interest rates to support the economy. The Nasdaq 100 tumbled 2.4% and the Russell 2000 gave back 3%. It was the most volatile day of the year for US stocks, put options traded hit their highest level since March 2023, while the 10-year Treasury yield broke below 4% for the first time since February.
Tech was the worst-performing S&P sector ETF with a 3.7% retreat; energy, consumer discretionary, industrials, and financials were also slammed. The VanEck Semiconductor ETF sank 6.5%.
The classic interest rate sensitive, defensive sectors — utilities, real estate, and health care — all gained more than 1%, while consumer staples also had a solid advance. It’s the first time at least 3 S&P sector ETFs gained 1% or more on a day when the stock market fell 1% or more since January 2001.
Meta bucked the carnage in the tech and tech-adjacent space thanks to strong earnings released after the close on Wednesday, gaining 4.8%.
Moderna, conversely, was the worst performer in the S&P 500, off a whopping 21% after cutting its full-year revenue forecast as it tries to fill the hole left by its declining Covid vaccine sales.
The more than 1% decline in the S&P 500 on its most volatile day of 2024 also featured most bearish derivatives bets in more than a year.
The total equity and equity index put options traded across US exchanges in the Options Price Reporting Authority surged to nearly 30 million on Wednesday, the highest level since the immediate aftermath of Silicon Valley Bank’s implosion in March 2023 and ensuing fears about the balance sheet strength of US regional banks.
The price of bitcoin hit a two-week low of $62,700 today before clawing back some gains.
The drop follows a heady weekend for the digital asset that saw former President Donald Trump pitch a “strategic national bitcoin stockpile” at a crypto industry conference in Nashville.
Wyoming Sen. Lummis followed Trump and announced her intention to file a bill to create such a reserve — she officially introduced the bill yesterday.
Now, as US presidential election odds shift — pollster Nate Silver officially called the race between VP Kamala Harris and Trump a "toss-up" — analysts say the market may be rethinking how the next president could affect the crypto industry, and as of now, the broader crypto market is showing signs of pessimism, with declines across the board.
Now, as US presidential election odds shift — pollster Nate Silver officially called the race between VP Kamala Harris and Trump a "toss-up" — analysts say the market may be rethinking how the next president could affect the crypto industry, and as of now, the broader crypto market is showing signs of pessimism, with declines across the board.
It’s not the worst day of the year for US stocks – at least not yet, though the S&P 500 is deeply in the red with a 1.9% loss as of 2:20pm ET.
But it is the most volatile day of 2024.
The benchmark US stock index was up about 0.8% in early trading before a particularly poor ISM Manufacturing report sent lines on charts lurching to the downside.
The gap between the intraday high and low prices accounts for about 2.6% of the S&P 500’s closing value from Wednesday, already outstripping the volatile sessions in April.
The VIX Index, which tracks the implied moves for the S&P 500 over the next month based on out-of-the-money options prices, has spiked to as high as 18.9.
A wild fact from Goldman Sachs managing director Brian Garrett about the significant swings in individual stocks as quarterly results roll in:
“If it’s felt like a volatile earnings season, that's because it is,” he writes in a note to clients. “In fact, this has been the most volatile earnings season since the financial crisis.”
So far, the average S&P 500 stock has gone up or down about 5% on the heels of releasing quarterly results.
2. Follow-through from yesterday’s Fed meeting, which fortified traders’ expectations that an easing cycle is imminent.
3. Geopolitical considerations that are pushing investors towards so-called safe haven assets like US government bonds. Hamas’ top political leader was killed in Tehran, increasing the risk of a regional war as Iran’s leader threatened revenge on Israel.
