US Stocks Slide After a Lackluster Employment Report

06 Sep 2021 · 3rd Party Analysis

US Stocks Slide After a Lackluster Employment Report

WRITTEN BY ThorFX

In Summary

  • Stocks mostly decline on Friday as the August jobs report signals growth might be losing steam
  • Bitcoin breaks above $52,000 in early Monday trading, floats less than 20% away from record

Stocks on Wall Street ended Friday on a mixed note after the US Labor Department published significantly lower-than-expected nonfarm payrolls numbers for August.

In a relatively quiet trading session on Friday, the Dow Jones Industrial Average lost 74.73 points, or 0.21%, to 35,369.09. The S&P500 edged lower by 1.52 points, or 0.03%, to 4,535.43. The tech-heavy Nasdaq Composite gained 32.34 points, or 0.21%, to end the day at 15,363.52.

The employment report released one hour before the opening bell on Friday showed the pace of hiring across the US slowed in August. The world’s largest economy added 235,000 new jobs last month, falling short of expectations for 720,000 positions.

A relatively unsatisfactory jobs data complicates the framework of the Federal Reserve’s tapering plans. Fed Chairman Jerome Powell, near the end of last month, said Fed policymakers saw significant further progress that would justify unwinding the ample monetary stimulus injected in the economy.

Against the backdrop of a slowdown in labor-market growth, analysts point that the US central bank might choose to wait at least a month longer before tapering to parse the jobs report for September.

Many economists, before the release of the August jobs data, predicted that the Fed would most likely announce the beginning of scaling down the $120bn in monthly asset purchases at the Fed’s upcoming policy meeting on Sept. 21-22.

On the other hand, market participants might interpret a potential delay in tapering as good news, at least in the short term.

The US stock market will be closed on Monday due to the Labor Day holiday. Both the New York Stock Exchange and the Nasdaq Stock Market will resume activities under their regular working hours on Tuesday.

Looking ahead into the week, economic data coming from the US will be fairly light. On Wednesday, several Fed officials, including New York Fed President John Williams, will share comments on their plans to begin tapering bond purchases in a potentially slowing down the economy.

In European market action, the pan-continental Stoxx 600 ended last week relatively unchanged. The benchmark index slipped on Friday after the US jobs report signaled the economic growth across the states might be coming to a halt.

Major indexes in the old continent also ended in the red. Spain’s IBEX35 was the biggest decliner, down 1.31%. In Paris, the CAC40 lost 1.08%, while the German DAX and the UK’s FTSE100 closed down 0.37%, and 0.36%, respectively.

European bourses are operating under normal conditions on Monday. In the early trading hours of the session today, stock gauges in the bloc float relatively unchanged as investors kick into gear for the week.

Bitcoin briefly spiked to $52,000 early on Monday, reaching a price level last seen in mid-May when cryptocurrencies were in solid decline. The leading token is now less than 20% away from its record high. Ether, the native coin to the Ethereum blockchain, slipped moderately earlier and is now hovering near the $3,920 price level.

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