US stocks mixed as jobs data clears path to higher interest rates – Michmutters

US stocks mixed as jobs data clears path to higher interest rates

“The strong gains in the job market last month should further cement the claim that the US is currently not in recession,” LPL Financial chief economist Jeffrey Roach said in a note.

The jobs report is good news for the economy, Commonwealth Financial Network’s Brad McMillan said. “More people working, at higher wages, is a sign of economic strength. And with all of the headlines out there, we can certainly use the good news.”

That said, McMillan said interpreting the data for the markets is more complicated. “With the Fed unleashed to keep raising rates, that will affect stock valuations negatively. But with growth likely to be stronger, earnings should grow faster.

“Overall, this combination has historically been positive, but we can certainly expect some turbulence in the short term as markets adjust.”

The yield on the US 10-year note leapt 14 basis points to 2.83 per cent in New York; the two-year yield closed at 3.23 per cent.

market highlights

ASX futures down 11 points or 0.16 per cent to 6903

  • AUD -0.9% to 69.11 US cents
  • Bitcoin +3% to $US23,187.07 at 7.30am AEST
  • On Wall Street: Dow +0.2% S&P500 -0.2% Nasdaq -0.5%
  • In New York: BHP +2.4% Rio +2.3% Atlassian +16.6%
  • Tesla -6.6% Apple -0.1% Amazon -1.2% Netflix -1.4%
  • In Europe: Stoxx 50 -0.8% FTSE -0.1% CAC -0.6% DAX -0.7%
  • Spot gold -0.9% to $US1775.50 an ounce in New York
  • Brent crude +0.7% to $US94.79 a barrel
  • Iron ore +2.9% to $US106.95 a tonne
  • 10-year yield: US 2.83% Australia 3.08% Germany 0.95%
  • US prices as of 4.59pm in New York

United States

Pfizer is in advanced talks to buy drugmaker Global Blood Therapeutics for about $US5 billion, the Wall Street Journal reported, citing people familiar with the matter.

Pfizer is aiming to seal a deal in the coming days, but other suitors are still in the mix, the report said.

Amazon will acquire iRobot, maker of the robotic vacuum cleaner Roomba, in an all-cash deal for about $US1.7 billion in the latest push by the world’s largest online retailer to expand its stable of smart home devices.

Amazon will pay $US61 per share, valuing iRobot at a premium of 22 per cent to the stock’s last closing price of $US49.99.


The pan-European STOXX 600 fell 0.8 per cent, leading to a 0.6 per cent decline on the week, on worries over dour economic data from the region, rising geopolitical tensions and fears that higher interest rates could tip the economy into a recession.

“The data published this week add to the evidence that a recession is just around the corner,” said Jack Allen-Reynolds, senior Europe economist at Capital Economics.

Figures this week also showed euro zone retail sales plunged in June and factory gate prices continued to rise, while euro zone business activity contracted in July for the first time since early last year.

“Forward-looking indicators suggest that worse is to come… If we are right, the European Central Bank will raise interest rates more aggressively than is currently priced into the market, and the economy will underperform consensus forecasts.”

Euro zone government bond yields jumped, with Germany’s 10-year bond yield last up 9 bps at 0.89 per cent.

Company results were mixed on Friday, with Deutsche Post up 4.6 per cent after posting double-digit growth in revenue and earnings.

London Stock Exchange Group gained 1.6 per cent on saying costs and savings targets for integrating its $US27 billion acquisition of data company Refinitiv remain unchanged and it was launching a £750 million share buyback.

Allianz fell 1.6 per cent. The insurer spent around €140 million on restructuring to wind down a US funds unit at the center of a multi-billion fraud, and posted a worse-than-expected 23 per cent fall in quarterly profit.


Iron ore futures rose on Friday, with Singapore’s benchmark contract rebounding after a five-session selloff, as a recovery in steel margins in China eased concerns about weak demand for the steelmaking ingredient.

Iron ore, however, was set for weekly losses amid worries about China’s ailing property sector, COVID-19 curbs, steel production cuts, and Sino-US tensions over Taiwan.

Iron ore’s front-month September contract on the Singapore Exchange was up 3.6 per cent at $US109.55 a tonne, as of 0700 GMT, after touching its weakest since July 25 at $US104.70 on Thursday.

On China’s Dalian Commodity Exchange, the most-traded January 2023 contract ended daytime trade 2.6 per cent higher at 723 yuan ($US107.18) a tonne.

“Fundamentals have improved marginally,” Zhongzhou Futures analysts said in a note, citing a rebound in steel margins that has prompted the restart of some of the idled blast furnaces in top steel producer China.

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