Wall Street is preparing to open a new week of trading in the red, after the heavy losses suffered last Friday, following the publication of the US employment report in September.
The figure highlighted the creation of 263,000 new jobs, slightly below the 275,000 new paychecks estimated by Dow Jones economists. The unemployment rate fell from 3.7% to 3.5% in September, positioning itself below the 3.7% expected by the consensus.
The report confirmed the slowdown in job growth in September: the increase in payrolls was in fact the lowest since April 2021, confirming how the continuous rate hikes by the Jerome Fed Powell are depressing the fundamentals of the US economy: what the central bank led by Jerome Powell wants to provoke in order to stave off inflation.
But traders were expecting a worse deterioration in the labor market, in order to smooth out expectations of an aggressive Fed on rates; and the drop in the unemployment rate has led operators to interpret US-made employment which is still too strong to convince the Fed to lay down the weapon of the monetary maxi-squeezes, to reduce the threat of inflation.
Consequently, the publication of the data was followed by strong sales, which led the Dow Jones index to slide by more than 600 points (-2.11%), to 29,296 points; the S&P 500 to lose 2.80% to 3,639 points, the Nasdaq Composite capitulated by 3.80% to 10,652 points.
Expectations of a still very hawkish Fed sent two-year Treasury rates to 4.316%.
Today is the national holiday of Columbus Day in the United States: the US stock exchange will remain open, while the bond market will remain closed.
The futures on the US stock indices have thus turned around, with those on the Dow Jones which have slipped to around -170 points.
This week’s appointments on Wall Street are crucial, with the publication of the data on inflation measured by the consumer price index (scheduled for Thursday’s session) and the accounts of the first giants of corporate America, which will disseminate the financial results , inaugurating the season of quarterly made in the USA.
Banks JPMorgan, Wells Fargo, Morgan Stanley and Citi will start (earnings will be disclosed in Friday’s session). Companies such as PepsiCo and Delta will follow next week.
At about 7 am Italian time, the futures on the Dow Jones file the losses, always falling by 86 points; futures on the S&P 500 lose 0.35%, those on the Nasdaq fall 0.40%.