Nonfarm payroll for July 2021
- Prior was 850K revise 938K
- nonfarm payroll 943K vs 870K estimate
- unemployment rate 5.4% vs 5.7% estimate. Prior unemployment rate came in at 5.9%
- Participation rate
- Underemployment rate vs 9.8% last month
- Average hourly earnings MoM vs 0.3% estimate
- Average hourly earnings YoY vs 3.9% estimate
- Two month net revision
- private payrolls 703K vs 700K est
- goods producing
- service producing
- part-time employment
- Manufacturing jobs
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Ahead of the report:
- the Dow was near unchanged.
- The Nasdaq futures implied a 21 point decline.
- The S&P was up 1 point.
- 10 year yield was at 1.251%.
- Crude oil was up $0.50 at $69.61.
- Gold was down -$7.00 at $1797.21.
Latest data released by the SNB – 6 August 2021
Slight delay in the release by the source. Swiss reserves have been keeping thereabouts since February, reaffirming the narrative that the SNB has been less active in intervening in the FX market as compared to last year.
The labor market report from the US is due at 1230 GMT on August 6.
Expected and priors for the main stats are as follows (exp first, prior is the second number)
- Non-farm payrolls 8,70,000 8,50,000
- Unemployment rate 5.7% 5.9%
- Average earnings m/m 0.3% 0.3%
- Average earnings y/y 3.8% 3.6%
- Average workweek hours 34.7 hrs 34.7 hrs
And, no estimates for these, just the previous:
- Labor force participation rate 61.6%
- U6 underemployment 9.8%
Q2 earnings coming in far higher than expected
- exceeding expectations by historically wide margins
- expect aggregate earnings per share for companies in the S&P 500 will be $207 this year, up from a previous forecast of $193
- Further ahead, 2022 expecting aggregate EPS of $212, up from $202
And, bond yields remain low
- “Lower interest rates than expected support a stable forward P/E multiple of 22x”
- the GS forecast for 10-year Treasury yield by year-end is 1.6% (from 1.9% previously)
Head of the Federal Reserve bank in Minneapolis Neel Kashkari
- says most of high inflation we are seeing are in a few sectors
- as economy returns more to normal, price increases will level off
- he’s not seeing evidence yet of high inflation readings driving up inflation expectations
- optimistic we should have a strong labor market in fall
- the wrinkle is delta; could make people concerned about reentering labor market
- we are still in a deep hole with 7-9 mln Americans out of work
- balance of power has swung in direction of labor; that won’t be permanent, will change as more reenter workforce
Kashkari is very much at the more dovish end of the FOMC spectrum. These comments are not indicating he is swinging towards a more hawkish outlook.
- Says have not made ‘substantial further progress’
- we are about one third out of the employment hole since December
- IF get a strong Labor market as expected in the Fall then would meet ‘substantial further progress’ bar
I bolded that bit – that is what K is watching.
Russell 2000 index rises by 1.81%.
The S&P and NASDAQ index both closed at record levels with a late day surge that has the indices going out near the highs for the day.
The Dow and the Russell 2000 index also had strong days, with the small-cap index outpacing the larger cap indices with a surge higher of 1.81%.
Highlight sectors included:
- energy +1.29%
- financials +1.25%
- utilities +1.11%
- discretionary +0.92%
- industrials +0.49%
- technology +0.54%
Lagging today were:
- healthcare -0.38%
- materials -0.14%
The final numbers are showing:
- S&P index rose 26.43 points or 0.60% at 4429.09. The intraday high reached a new record at 4430.30
- Dow industrial average rose 270.92 points or 0.78% at 35063.59
- NASDAQ index rose 114.58 points or 0.78% at 14895.12. Its intraday high reached 14896.50. That is the new all-time record high.
- Russell 2000, +39.67 points or 1.81% at 2235.99