(Friday Market Open) The much-awaited June Unemployment Situation report finally arrived this morning but judging from the immediate downturn in S&P 500 futures, investors didn’t get what they wanted.
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In June, the economy added 372,000 jobs last month, well above the estimate of 268,000. Average hourly wages came in as expected but were lower than the previous month and the unemployment rate stayed at 3.6%.
The takeaway? There’s little in today’s numbers to suggest that the Federal Reserve will curtail its present plans for aggressive rate hikes to curb inflation. In fact, the 10-year Treasury yield (TNX) traded higher on the news, indicating that bond buyers are expecting more rate increases as well.
The one negative item in the jobs report was the participation rate. It fell during June, which suggests that some workers aren’t seeing the incentives they need to stay in the workforce. This may be due to wages not keeping up with inflation.
Meanwhile, Elon Musk’s deal to buy Twitter (NYSE: TWTR ) appears to be in jeopardy due to the inability of Musk’s team to confirm figures on spam accounts, according to The Washington Post . These numbers matter for their impact on Twitter’s ability to sell advertising on their platform. Twitter’s management team has been unable or unwilling to provide the “real” number, the Post says, which has caused Musk to pause his $44 billion deal.
While the Twitter deal is in limbo, Elon Musk’s Tesla (NASDAQ: TSLA) reported that its China shipments have set a record as its China plant opened back up from the country’s COVID-19 restrictions. Tesla shipped 78,906 vehicles last month which was more than double than the 33,155 in the same period a year ago.
General Motors (NYSE: GM ) hasn’t been able to keep pace with Tesla selling vehicles within China, the biggest automotive market in the world. GM saw its vehicle sales fall 35.5% in June year-over-year (YOY) in China while Tesla reported a decrease of 18%. GM reported that its auto sales has fallen due to shortage in computer chips and due to continued Chinese pandemic lockdowns.
Mastercard SpendingPulse, which measures in-store and online retail sales for types of payments, U.S. consumer retail spending rose 9.5% YOY when excluding auto sales. Sales grew 6.1% YOY when excluding autos and gas. However, the numbers aren’t adjusted for inflation which means much of the growth could be due to higher prices. The report showed that investors are also getting out to brick-and-mortar stores with in-store spending rising 11.7% from the year-ago period, while e-commerce rose just 1.1% over the same timeframe.
Levi Strauss (NYSE: LEVI ) appears to be ringing up ...
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