This week the market’s expectations have been confronted with the reality of job growth in the USA, high inflation numbers coming out of the UK and a pessimistic view of the future by the Bank of England.
The bear market rally may have halted or cooled down for now. Will the FED signal additional large interest rate hikes until the end of the year? Maybe…
U.S. Job Growth Unexpectedly Soared in July
Source: The New York Times
The
employment gains, which far surpassed expectations, show that the labor
market is not slowing despite efforts by the Federal Reserve to cool
the economy.
Video: Worst economic prediction for a generation – as UK heads for recession
Channel: Channel 4 News
Video: Jobs Report Makes Notion of Fed at Neutral ‘Comical’: El-Erian
Channel: Bloomberg Markets and Finance
Video: Summers: The Economy Is in an Overheated State
Channel: Bloomberg Markets and Finance
As Monkeypox Spreads, U.S. Declares a Health Emergency
Source: The New York Times
The
designation will free up emergency funds and lift some bureaucratic
hurdles, but many experts fear containment may no longer be possible.
COMMENT: Now that we are approaching winter, is monkeypox going to become the new COVID??? Maybe…
China sanctions Pelosi over ‘provocative’ visit to Taiwan
Source: REUTERS
China
has decided to sanction U.S. House of Representatives Speaker Nancy
Pelosi and her immediate family in response to her “vicious” and
“provocative” actions, the Chinese foreign ministry said on Friday.
“Despite
China’s serious concerns and firm opposition, Pelosi insisted on
visiting Taiwan, seriously interfering in China’s internal affairs,
undermining China’s sovereignty and territorial integrity, trampling on
the one-China policy, and threatening the peace and stability of the
Taiwan Strait,” a ministry spokesperson said in a statement.
US natural gas futures fell toward the $8.0/MMBtu mark amid prospects of weakening air-conditioning demand due to less hot weather and after EIA reported a bigger-than-expected gas storage build last week. Data showed US utilities added 41 billion cubic feet of gas to storage during the week ended July 29th, well above expectations of 29 bcf. Also, Freeport LNG, a key export terminal in Texas, agreed with regulators to restart as soon as October. Meanwhile, demand from Europe continues to support prices as the key Nord Stream 1 pipeline from Russia to Germany is currently running at 20% capacity. Russia has already halted shipments to Denmark, Finland, Bulgaria, the Netherlands, and Poland and reduced supplies to Germany for not consenting to its natural gas payments demand in Russian rubles.
The Dow rose more than 70 points on Friday, while the S&P 500 and Nasdaq dropped 0.2% and 0.5%, respectively, after the US jobs report showed larger-than-expected payroll gains and wage growth, which will keep the Fed aggressively tightening monetary policy. The Labor Department’s closely watched report showed that the US economy added 528K payrolls in July 2022, well above Wall Street expectations. The data followed hawkish comments from several Fed policymakers, which made a policy pivot even more elusive as the central bank sought to cool an overheating economy. Banks and energy stocks advanced while Tesla and other tech companies slumped. Focus now shifts to inflation data due next week, with US annual consumer prices expected to rise by 8.7% in July after a 9.1% surge in June. For the week, the Dow lost 0.1%, while the S&P 500 and the tech-heavy Nasdaq have outperformed by adding 0.4% and 2.2%, respectively.
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