Wall Street posted another session of sharp declines, with -1.9% on the S&P500 (5,346, medium-term support broken) and -2.45% on the Nasdaq (at 16,760, after an incursion towards 16,580 around 4:15pm) and -1.6% on the Dow Jones at 39,700 points.

Over the week, the S&P-500 and Dow Jones lost -2.1%, the Nasdaq 3.35%, which is not very impressive.... on the other hand, volatility literally soared, with the 'VIX' up 60% at the start of the session (to 29.65, its worst mark since March 2023) and a 'lull' to 23.4, i.e. +26%, which will remain the worst score since the start of the year, ahead of the +22.5% of July 27.

It would therefore be no exaggeration to speak of paroxysmal volatility, which is a fair reflection of anthology sell-offs such as the one seen on
Intel, with -30% during the session and -26% at the close (at $21.5), its worst fall in history: the stock is back to its December 2012 levels.

Also of note were Amazon (-8.8%), Applied Material (-7.4%), Super Micro Computer (-7.1%), Microchip (-10.6%) and Nvidia (-1.8%), which started the session down 6% (under investigation for abuse of dominant position).

Wall Street was dampened by the publication of US employment statistics for July: the slowdown in the US labor market was sharper than expected, with the US economy generating just 114,000 non-farm jobs in July, according to the Labor Department, well below market expectations, which were generally in the region of 170,000.
The unemployment rate rose by a sharp 0.2 points to 4.3%, where economists had expected it to remain stable at 4.1%, while the labor force participation rate stood at 62.7%, and average hourly earnings rose at an annual rate of just 3.6%.

In addition, nonfarm job creations for the previous two months were revised, from 218,000 to 216,000 for May and from 206.000 to 179,000 for June, i.e. a total revision balance of -29,000 for these two months (10th downward revision in the last 14 months).

This marked deterioration in the labor market could also raise concerns about the health of the US economy, as Fed Chairman Jerome Powell indicated on Wednesday that he was worried about a possible "hard landing" for growth.
These concerns were reinforced 90 minutes later by the unexpected -3.3% drop in industrial orders (the second fall in a row), when economists were forecasting a rebound of around 0.5%.

These worse-than-expected figures confirm the less rosy picture of the US economy painted by the statistics published in recent weeks, in particular the employment report unveiled this morning, which some analysts described as "worrying".

Friday's wave of risk-offs prompted a flight to safe-haven assets: US T-Bonds fell -18 basis points to 3.795% (and as much as -19 basis points to 3.785%), while the 2-year bond was down -27 basis points to 3.874%, which means that expectations will rise to -50 basis points (and no longer -1/4 basis point) at the FED's next meeting in September.

Copyright (c) 2024 CercleFinance.com. All rights reserved.