Wednesday's Markets Update (July 3, 2024)

04 Jul 2024 by rate3

On Wednesday, stocks rose in a shorter session, with the S&P and Nasdaq hitting new all-time highs as weaker economic data fueled investor belief in an interest rate cut by the Fed. The data showed a slowdown in services and job growth. Tesla continued its strong performance. On global markets, gold is up as the dollar is down. BTC fell to $60K again, possibly due to upcoming repayments by Mt. Gox and whales preparing for geopolitical volatility.

Details

Job cuts decreased in June compared to May, but were still higher than a year ago. This is the highest June number since 2009 (excluding 2020). Consumer products and tech saw the most cuts. Construction cuts surged in June. 1Y trend: "Up" (CHL)
Private businesses added 150K jobs in June, lower than expected. Service sectors led growth, while manufacturing and mining declined. Leisure and hospitality hiring surged, preventing a weaker report. The economist noted uneven job growth, and a slowdown in wage increases for those switching jobs. 1Y trend: "Up" (ADP)
Jobless claims unexpectedly rose to 238K in late June, near a 10-month high. Continuing claims also climbed to 1.86 million, the most since November 2021. 1Y trend: "Up" (DOL)
Services sector unexpectedly contracted in June, hitting a 4-year low (48.8 PMI). This is worse than forecasts (52.5) and May's reading (53.8). Business activity and new orders also dropped. Survey results show a general slowdown and ongoing job cuts. Inflationary pressures remain, though some price increases have eased. 1Y trend: "Down" (ISM

Crypto

According to DARPA, governments are taking action focusing on areas where quantum computing might bring benefits, like materials science, but the technology's effectiveness in nonlinear differential equations remains uncertain. (source)

World Markets

The Eurozone service sector grew for a fifth month in June, but at a slower pace. New business slowed due to weaker export demand, but domestic orders remained strong. Employment growth eased but stayed positive. Price pressures declined but haven't reached pre-pandemic levels. Business confidence improved. 1Y trend: "Up" (PMI)
The Eurozone economy grew slowly in June, with services barely expanding and manufacturing contracting. New orders fell, and job growth eased. Though price hikes slowed, businesses remained optimistic about future service sector activity. This is a revised reading, up slightly from a preliminary estimate. 1Y trend: "Up" (PMI)
Russia's unemployment rate reached a record low of 2.6% in May, even though the number of unemployed people went up. This rate was better than expected, but still higher than May 2023's 3.2%. 1Y trend: "Down" (ROS)

Currencies

Weak economic data, like a shrinking service sector, led investors to believe the Fed might cut interest rates. The dollar weakened as a result. Investors are waiting for clues from the Fed's minutes and jobs data later this week. 1Y trend: "Up"

Commodities

Gold prices surged to a one-month high, fueled by a weakening dollar and falling Treasury yields. This follows economic data suggesting a slowdown in the US economy and raising expectations of Federal Reserve rate cuts in September. A similar trend is anticipated in other countries like the UK and China. Lower interest rates make holding gold, which doesn't offer interest, more attractive. 1Y trend: "Up"