Dow Jones Industrial Average whipsaws post-NFP

July 5, 2024 9:18 pm

  • Dow Jones churned but went nowhere after US NFP beats forecasts.
  • Despite NFP beat, steep revisions sparked rate cut hopes.
  • Rebounding risk sentiment pushed other indexes higher but left Dow Jones behind.

The Dow Jones Industrial Average (DJIA) whipsawed on Friday, churning around 39,300.00 after US Nonfarm Payrolls (NFP) gave markets just enough wiggle room to reignite rate cut hopes. The broader US equity market firmly climbed on fresh expectations of a rate trim from the Federal Reserve (Fed), but the Dow Jones remained mired in technical consolidation.

Read more: US Nonfarm Payrolls increase 206,000 in June vs. 190,000 forecast

Friday’s US NFP beat median market forecasts, adding 206K net new jobs in June. While the figure handily beat the expected 190K, the previous month saw a sharp downside revision to 218K from the initial print of 272K.

US Average Hourly Earnings growth also cooled for the year ended June, easing to the expected 3.9% YoY compared to the previous period’s 4.1%. The US Unemployment Rate also ticked higher, rising to 4.1% for the first time since December of 2021. Markets had broadly forecast a hold at 4.0%.

Fed Semi-Annual Policy Report: Need greater confidence before moving to rate cuts

Investors have brushed off the above-forecast NFP print to focus on rising unemployment, cooling wages, and downside revisions to previous jobs reports to scale up bets that the Fed will get pushed towards rate cuts sooner rather than later. According to the CME’s FedWatch Tool, rate markets are pricing in nearly 80% odds of at least a quarter-point rate trim on September 18.

Economic Indicator

Nonfarm Payrolls

The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months’ reviews ​and the Unemployment Rate are as relevant as the headline figure. The market’s reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.

Read more.

Dow Jones news

Despite struggling to match Friday gains posted by other major equity indexes, Dow Jones is tilted notably into the high side. Two-thirds of the DJIA’s constituent equities are in the green, with losses being led by Chevron Corp. (CVX) which fell -1.65% to $154.13 per share. Dow Inc. (DOW) trails close behind, backsliding -1.43% to $52.12 per share.

Walmart Inc. (WMT) has surged to the top of the index, climbing 2.4% on the day and challenging $70.00 per share, followed by Intel Corp. (INTC) which gained 2.2% on Friday, pushing into $32.00 per share.

Dow Jones technical outlook

The Dow Jones closes out the first trading week of July struggling to keep above 33,300.00 after a protracted week of chart churn. The index bottomed out late last week near 38,920.00, but a recovery has faced significant downside pressure, this repeated failures to break free of the week’s peak bids near 39,440.00.

The Dow Jones remains hobbled by as supply zone priced in above 39,750.00, and bidders remain unable to shoulder the equity index back above all-time peaks set above 40,000.00 in May.

Dow Jones hourly chart

Dow Jones daily chart

Economic Indicator

Nonfarm Payrolls

The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months’ reviews ​and the Unemployment Rate are as relevant as the headline figure. The market’s reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.

Read more.

Feed from Fxstreet.com

MoneyMaker FX EA Trading Robot