Wall St Falls as Jobs Data Reinforces Bets on Higher Rates

The labor force participation rate, the share of the population working or looking for work, advanced to 62.4 percent, matching the highest level since March 2020. The rate of workers ages 25 to 54 rose the most from June 2020 to 82.8 percent. The participation of adolescents also increased.

Former Treasury Secretary Lawrence Summers dismissed any optimism about the influx of people into the US workforce in August, focusing instead on the inflationary potential of continued strong job gains.

“There is a tendency to exaggerate how much more participation will reduce inflation,” Summers told Bloomberg. “People think it’s an additional labor supply, but they forget” about the increase in employment that increases income and therefore spending, which in turn drives the demand for labor.

The economic soft landing expected by equity bulls is unlikely given persistently higher inflation and risks of a global economic slowdown, according to Peter Oppenheimer of Goldman Sachs Group.

The chief global equity strategist told Bloomberg that while major equity markets have fallen so far this year, they need to fall further if inflation remains high longer and global downside risks to the growth in the US, China and the United States. Europe.

In its weekly review of investment flows, Bank of America said cash expanded by $4.8 billion, gold lost $900 million, bonds lost $4.2 billion and stocks lost $9.4 billion.

In a sign of the turmoil in the markets, BofA said last week saw the largest outflow of US equities in 10 weeks ($6.1 billion), while at the same time marking the largest inflow of technology since April 2022 ($US1.5 billion).

Market Highlights

ASX futures were down 16 points or 0.23 percent at 6,792 by 7am AEST.

  • AUD +0.4% to 68.12 cents
  • Bitcoin -0.6% to $US19,987 around 7:10am AEST
  • On Wall Street: Dow -1.1% S&P500 -1.1% Nasdaq -1.3%
  • In New York: BHP +0.7% Rio +0.3% Atlassian -1.3%
  • Tesla -2.5% Apple -1.4% Alphabet -1.7% Microsoft -1.7%
  • In Europe: Stoxx 50 +2.5% FTSE +1.9% CAC +2.2% DAX +3.3%
  • Spot gold +0.9% at $1,712.19/oz at 4:59pm in New York
  • Brent Crude +0.7% to $93.02/barrel at 5:59 p.m. in New York
  • Iron ore -0.6% at $US95.00 per ton
  • 10-year yield: US 3.19% Australia 3.64% Germany 1.52%
  • Prices in the US at 16:59 in New York


Amazon, determined to downsize its sprawling delivery operation amid slowing sales growth, has abandoned dozens of existing and planned facilities in the US, according to a closely watched consulting firm.

MWPVL International, which tracks Amazon’s real estate footprint, estimates that the company has closed or scrapped plans to open 42 facilities totaling nearly 25 million square feet of usable space.

The company has delayed the opening of an additional 21 locations, totaling nearly 28 million square feet, according to MWPVL. The e-commerce giant has also canceled a handful of European projects, mainly in Spain, the firm said.

The FBI recovered more than 11,000 government documents and photos during its Aug. 8 search of former President Donald Trump’s Florida estate, as well as 48 empty folders labeled “classified,” according to court records unsealed Friday.

BlackRock’s Rick Ridier said: “The #Fed has outlined a willingness, and indeed a desire, to reduce demand in the system, with somewhat higher levels of #unemployment resulting from the need to address persistent high levels of # front inflation. .

“As a result, the door is still open for the #Fed to move further, and we also think this keeps the potential for a 75bp hike at the September meeting still on the table.”


European stocks rose on Friday, posting gains for the first time in six days.

The pan-European STOXX 600 advanced 2.0%, but posted a weekly decline of 2%.

Russian gas flows through the Nord Stream 1 pipeline to Germany remained at zero on Friday morning after Russia’s Gazprom halted supplies for a three-day maintenance outage on August 31.

“I think the global economy, especially the European economy, remains hostage to whatever Russia decides to do with gas flows, at least for next winter,” said Andrea Cicione, London-based chief strategist at TS Lombard. “We just have to prepare for more potential problems coming from Russia.”

Credit Suisse rose 6.1% on reports that Switzerland’s second-largest bank is considering cutting around 5,000 jobs in a cost-cutting drive.

Ryanair firmed up 2.0% as the Irish low-cost airline posted a record number of passengers in August for the fourth consecutive month.

Ares Management has hired Blackstone’s Mark Serocold to lead a new investment unit targeting wealthy Europeans.

raw Materials

Oil rose, avoiding a sharp weekly drop, as OPEC ministers and allies prepare to discuss crude output amid a cloudy outlook for a new Iranian nuclear deal.

West Texas Intermediate futures rose above $89 a barrel on Friday, trimming the weekly gain to around 6%. Oil came under pressure earlier in the week as tighter monetary policy and new anti-virus lockdowns in China raised demand concerns.

Meanwhile, traders ignored an announcement by G7 leaders of plans to cap the price of Russian crude in retaliation for Vladimir Putin’s aggression in Ukraine.

The G-7 move is largely symbolic “as the Russians are proving capable of circumventing restrictions already imposed by G-7 countries and reaching record export volume in August despite sanctions,” they wrote. analysts at wholesale fuel distributor TACenergy in a note to clients.

With Bloomberg, Reuters

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