US stock markets indices were quickly on the retreat on Friday, recording their second consecutive session deep in the reds as investors got spooked from latest round of jobs data from the United States.
All three major equity averages fell by more than 2% and snapped their waning, record breaking rally as July’s weaker than expected data, showcased that the US economy managed to only add 73k new jobs, contrary to the 110k economists’ consensus and the unemployment rate up ticked to the 4.2% level.
Not only that, but sharp downward revisions to the results of the prior three months, highlighted that the weakness in the labour market is much deeper than originally thought of. An astonishing 258k jobs were “mistakenly “overinflated in the past quarter, prompting President Trump to abruptly fire the head of Bureau of Labor Statistics Commissioner Erika McEntarfer whom he accused of falsifying the data.
In light of new evidence, this data forced traders to run back to the drawing board and re-chart the Federal Reserve’s policy path onwards and money markets ramped up the odds for a 25bps cut as early as the September meeting, assigning an 85% probability but also a similar magnitude follow up cut in October.
Equity traders now will inevitably look out for earnings calls from big names such as Palantir, AMD, Caterpillar, McDonalds, Walt Disney, Uber, Eli Lilly and many others, in hopes that the data could sustain a positive enough overall sentiment and lead the indices to higher ground yet again.
Technical Analysis
US100 Chart – The tech heavy Nasdaq 100 snaps waning winning streak after NFP data, drops from record highs
Resistance: 23500 (R1), 24600 (R2), 26000 (R3)
Support: 22235 (S1), 20800 (S2), 19300 (S3)
