US equities tumbled broadly Thursday after strong labour data from the ADP Research Institute fueled fresh bets that the Federal Reserve would need to ramp up its monetary medicine, sending two year Treasury yields to levels last seen in 2007. The Dow closed more than 365 points lower while the S&P 500 and the Nasdaq fell by 0.8% each. European markets, meanwhile, fell even further, with the Euro Stoxx 50 Index tumbling by almost 3% to end May’s lows. 

Summary for 07.07.2023 

  • Most Asian equities fell sharply on Friday, extending losses from the prior session as signs of a robust US labour market drove up concerns over rising interest rates, with focus now turning to nonfarm payrolls data due later in the day. The S&P/ASX 200 and Kospi indices sank 1.8% and 1.5%, respectively, while the Nikkei, Hang Seng and Shanghai Composite indices also posted notable declines. 
  • European futures are modestly firmer following yesterday’s steep losses while US futures were trading around the flatline as investors await another round of JU jobs data for clues of the Federal Reserve’s interest-rate path. 
  • Oil prices kept to a tight range on Friday but were still set for a second straight week of gains amid signs of tighter supplies and improving demand. Data on Thursday showed that US inventories shrank more than expected in the week to June 30, with a bigger-than-expected drop in gasoline inventories indicating improved fuel demand amid the travel-heavy summer season. 
  • Private businesses in the US unexpectedly created 497k jobs in June, the most since February 2022, and well above forecasts of 228k. The services sector added 373k jobs while the goods-producing industry added 124k jobs. On the wage front, pay increases slowed for both job changers and job stayers. 
  • Also in the US, the number of job vacancies fell by 496k from the previous month to 9.824 million in May, slightly below market expectations of 9.935 million. While easing below the 10 million threshold, the openings remained sharply above levels prior to the pandemic, backing evidence of a tight labour market. 
  • The ISM Services PMI unexpectedly jumped to 53.9 in June, pointing to the strongest growth in the services sector in four months, and well above 50.3 in May and forecasts of 51. 
  • Chancellor of the Exchequer Jeremy Hunt is planning to roll back a piece of European Union legislation that forced financial firms to separate cost of investment research from trading expenses, as part of his efforts to boost the attractiveness of the UK’s financial services sector.  
  • ExxonMobil shares fell 3.7% yesterday after the company, in a filing with securities regulators, indicated its second-quarter operating margin fell sharply due to weakness in natural-gas prices and lower oil refining margins. 
  • Meta Platforms shares were down slightly on Thursday despite CEO Mark Zuckerberg saying the company’s new Threads app had surpassed 10 million signups within seven hours of launch. 
  • JetBlue Airways shares tumbled 7.2% after announcing it would end its partnership in the northeast with American Airlines to focus on Spirit Airlines. American Airlines shares fell 2.3%, while Spirit rose about 1.2%.