o S&P 500 up 2 points, 0.06%, to 3,351.28
o DJIA up 46 points, 0.17% to 27,433.48
o NASDAQ down 97 points, 0.87%, to 11,010.98
o Russell 2000 up 24 points, 1.59%, to 1,569.18
o U.S. 10-yr up 3 bp to 0.566%
o WTI Oil down 1.05% to $41.51
Markets closed in mixed territory to close out the week as investors reacted to the July jobs report, which revealed just under 1.8 million jobs were added last month, beating expectations. The unemployment rate also fell from 11.1% to 10.2%. You can read more about last month’s jobs report in our Economic Data section below. Also, tensions between the U.S. and China escalated after President Trump issued an executive order, which takes effect in 45 days, banning dealings with the Chinese owners of social media apps TikTok and WeChat. The order cites that the apps “threaten the national security, foreign policy and economy of the United States.” Meanwhile, reports out of Washington were not encouraging in regards to the ongoing coronavirus stimulus negotiations, where talks between Democrats and Republicans reportedly were “on the brink of collapse”, according to the Wall Street Journal. The weekly $600 unemployment aid remains one of the biggest disputes, in addition to funding for schools, state and local governments. Wall Street will continue to monitor developments over the weekend out of Washington, as President Trump has stated he is considering utilizing executive actions to move forward with unemployment benefits, among other items.
Jobs Report (July)
The US economy added 1.76 million jobs in July, easing from a record 4.8 million in the previous month, as a resurgence in COVID-19 cases hit the labor market recovery. Still, the reading beat market expectations of a 1.67 million increase, boosted by jobs in leisure and hospitality (one third of the gain), government, retail trade, professional and business services, other services, and health care. Manufacturing Payrolls increased by 26k in July, below expectations for a 267k increase. Overall, nonfarm employment remains 12.9 million below its pre-pandemic level. The participation rate of 61.4% was little changed compared to June, after rising in the prior two months. The unemployment rate dropped to 10.2% in July from 11.1% in June and below market expectations of 10.5%, as many businesses continued to reopen and rehire employees following COVID-19 lockdowns. The number of unemployed persons fell by 1.4 million to 16.3 million. However, the jobless rate remains above the Global Financial Crisis peak of 10.0%, and more than double than February’s 3.5% before the spread of the pandemic in the US. Average hourly earnings for all employees on US private nonfarm payrolls rose by 7 cents, or 0.2%, against market expectations of a 0.7% decline and following a 1.3% fall in June. Nonfarm private payrolls increased by 1.46M. Average weekly hours decreased to 34.50 Hours in July from 34.60 Hours in June.
Booking Holdings — Shares stayed flat after the company reported a loss of $10.81 per share for its latest quarter, smaller than the loss of $11.50 predicted by Wall Street analysts. The parent of Priceline, Booking.com, Kayak and other travel services also saw revenue beat estimates, even as the pandemic caused a 91% drop in travel bookings from a year earlier.
TripAdvisor — The travel review site reported a quarterly loss of 76 cents per share, wider than the 63 cents a share loss representing the consensus analyst estimate. TripAdvisor also beat revenue beat forecasts, however, and said travel demand trends have been improving since the April low. Shares closed over 2% lower.
Uber — Shares fell 5% after the ride-hailing company reported it lost $1.02 per share for its latest quarter, a loss that was 16 cents a share wider than Wall Street was expecting. Revenue was better than forecast. Demand for Uber’s ride-hailing service saw a halting recovery amid the Covid-19 pandemic, but business for the company’s Uber Eats food delivery service more than doubled compared to a year earlier.
All estimates come from Econoday’s survey of economists/analysts. Earnings per share estimates are from Factset, are set against year ago results, and represent adjusted earnings.