(Illinois News Daily) As the coronavirus delta mutants are rampant worldwide and already pose another threat to uncertain economic recovery, a wave of relief spilled over the market, especially as investors digested enough to be optimistic about the numbers, but not enough to do the same for Jay Powell.
A July employment report from the US Department of Labor reported that 943,000 new jobs were created and the unemployment rate fell from 5.9% to 5.4%, closing at record highs. Powerful prints have succeeded in offsetting growing concerns about cyclical slowdowns in economic growth and the potential impact of the surge in COVID cases using delta variants.
The report also provided brighter images ADP Private Sector Employment Report from Wednesday Only 330,000 jobs were added in July, well below expectations of 653,000. The report heightened concerns about the economic implications of the COVID revival, but ADP figures are unreliable during the pandemic and many investors adopt a stance that they will not panic until they see Friday’s figures. I was forced to do that. Take into account the spread of the delta variant.
But Friday’s report was enough to please investors over the weekend, but next week as the same investors realize that printed matter wasn’t enough to change the spirit of easing the Federal Reserve. May have a real impact.
“This number was really good, but the best thing was that the Fed wasn’t strong enough to have to change policy,” LPL Financial’s chief market strategist Ryan Detrick wrote on Friday.
The Federal Reserve Board has revealed that it wants to initiate a terrifying withdrawal of monetary stimulus, including a tapering of bond purchases. A weakness to maintain low interest rates for some time.
Federal Reserve Board Chair Powell and his fellow policy makers have the index finger on the “taper” button, about as much as the surge in new COVIDs among the increasingly vaccinated population. Despite creating horror on the streets, Friday’s employment report may mean that the trigger isn’t pulled, yet a bailout that’s likely to be reflected in next week’s deal.
Issac Boltansky, Director of Policy Research at Compass Point, said: “But he and the majority of his colleagues will want to see more progress before the taper begins.
That “good but not so good” feeling reflected in US Treasury yields, 10-year Treasury yields jumped about 7 basis points to settle to 1.288% on Friday, and yields are still at the bottom of the year’s range.
There are no big winners in the tech sector from an optimistic start to next week.The only stock index to pull back on Friday was the high-tech Nasdaq Composite Index.
Everything was closed due to higher bond yields.
Friday’s optimistic mood may spread next week, but it doesn’t seem to be destined for a long time.
Next week will also bring the Consumer Price Index for July on Wednesday. Investors hope that federal leaders and other economists will meet again at the end of August in Jackson Hall, Wyoming, to talk about tapering again.
But recently, the emperor of US monetary policy has become a problem, so even Powell’s future isn’t the only topic. Powell’s term ends in February 2022, and the question is whether President Joe Biden will nominate him for the second term.
“More broadly, there are many on the horizon, such as the impact of Delta variants, the expiration of enhanced unemployment benefits, the roll-off of mortgage grace, the uncertainty about the moratorium on eviction of peasants, and the return of children to school. There are known unknowns, “says Voltansky. .. “And, of course, the Fed’s leadership.”
