Stocks Rise as Traders Look Past ‘Soft’ Jobs Data: Markets Wrap

(Bloomberg) — Stocks rose as traders looked past a big downward revision of US payrolls to focus on prospects for Federal Reserve rate cuts in the run-up to Jerome Powell’s speech on Friday.

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Equities edged higher, resuming their August advance after a small drop in the previous session. While the annual revision to US jobs growth isn’t something that would usually impact trading, it got attention this time around due to the recent concern the labor market is cooling too much amid elevated Fed rates.

US job growth was probably far less robust in the year through March than previously reported, according to government data out Wednesday. The number of workers on payrolls will likely be revised down by 818,000 for the 12 months through March — or around 68,000 less each month — according to the Bureau of Labor Statistics’ preliminary benchmark revision. While economists largely anticipated a decline, some predicted a loss of up to 1 million jobs.

“The main message from the revisions in my mind is reinforce just how silly it is to let the next jobs number be the determinant in whether to go 25 or 50 in September,” said Neil Dutta at Renaissance Macro Research. “What this revision data imply is that whatever the next jobs number is going to be, it’s probably lower in reality.”

The S&P 500 hovered near 5,610. Target Corp. climbed 11% after ending a string of sales declines in the second quarter, citing improved discretionary spending. Macy’s Inc. slightly missed estimates for its quarterly revenue and lowered its outlook for sales during the rest of the year.

Treasury 10-year yields declined two basis points to 3.79%. Swap traders are again pricing 100 basis points of Fed cuts in 2024. Traders will also scour minutes from the latest Fed policy meeting, at which the central bank held interest rates steady. Oil rose, snapping a short run of declines, as US crude stockpiles shrank more than expected.

Corporate Highlights:

• Ford Motor Co. is recalibrating its electrification strategy yet again, canceling plans for a fully electric sport utility vehicle in a shift that may cost the carmaker around $1.9 billion.

• Walmart Inc. raised about $3.6 billion by selling its stake in Chinese e-commerce firm JD.com Inc., winding down an eight-year partnership that appears to be paying diminishing returns amid a challenging landscape for Chinese tech giants.

• US coal producer Consol Energy Inc. agreed to merge with Arch Resources Inc. in a $2.3 billion deal as the transition to greener fuels threatens the industry’s long-term outlook.

• Brookfield Asset Management is asking banks to line up about €9.5 billion ($10.6 billion) of debt for its potential take-private deal for Spanish pharmaceutical producer Grifols SA, according to people with knowledge of the matter.

Story continues

Key events this week:

• Eurozone HCOB PMI, consumer confidence, Thursday

• ECB publishes account of July rate decision, Thursday

• US initial jobless claims, existing home sales, S&P Global PMI, Thursday

• Japan CPI, Friday

• BOJ’s Kazuo Ueda to attend special session at Japan’s parliament to discuss July hike, Friday

• US new home sales, Friday

• Jerome Powell speaks in Jackson Hole, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.3% as of 11:13 a.m. New York time

• The Nasdaq 100 rose 0.4%

• The Dow Jones Industrial Average was little changed

• The Stoxx Europe 600 rose 0.4%

• The MSCI World Index rose 0.3%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.1129

• The British pound rose 0.2% to $1.3060

• The Japanese yen fell 0.2% to 145.56 per dollar

Cryptocurrencies

• Bitcoin rose 0.3% to $59,470.25

• Ether rose 0.4% to $2,601.15

Bonds

• The yield on 10-year Treasuries declined two basis points to 3.79%

• Germany’s 10-year yield declined two basis points to 2.20%

• Britain’s 10-year yield was little changed at 3.91%

Commodities

• West Texas Intermediate crude rose 0.3% to $73.37 a barrel

• Spot gold fell 0.3% to $2,505.34 an ounce

This story was produced with the assistance of Bloomberg Automation.

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