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10/07/2023

Today’s Announcements & News

Asia

Markets in the Asia-Pacific region recorded a second day of declines following a sell-off on Wall Street triggered by stronger-than-expected U.S. jobs data, indicating a potential for more rate hikes by the Federal Reserve.

According to payroll processing firm ADP’s report on Thursday, companies created significantly more jobs than anticipated. Private sector jobs experienced a surge of 497,000 during the month, surpassing the Dow Jones consensus estimate of 220,000. This marked the largest monthly increase since July 2022.

The release of the Federal Reserve’s June meeting minutes on Wednesday further reinforced the expectation of additional rate hikes, with most officials indicating their support for such measures.

Meanwhile, U.S. Secretary of Treasury Janet Yellen is currently in Beijing for a four-day trip, where she will meet with Chinese officials, signifying a further thawing of relations between the United States and China.

In market performance, Hong Kong’s Hang Seng index fell 0.9% in its final trading hour, while the Hang Seng Tech index dropped by nearly 1%. Mainland China’s Shanghai Composite declined by 0.28% to 3,196.61, and the Shenzhen Component fell 0.73% to close at 10,888.55.

In Australia, the S&P/ASX 200 index experienced a significant decline of 1.69%, leading losses in the region, closing at 7,042.3.

Japan’s Nikkei 225 index fell 1.17% to end the session at 32,388.42, and the Topix index shed 0.97%, closing at 2,254.9. South Korea’s Kospi index slid by 1.16% to close at 2,526.71, as Samsung Electronics estimated a 96% likely plunge in its second-quarter operating profit.

US

Stocks ended the week on a negative note, with concerns about the Federal Reserve potentially raising interest rates impacting market sentiment. The S&P 500 lost 0.29% to close at 4,398.95, while the Nasdaq Composite dipped 0.13% to 13,660.72. The Dow Jones Industrial Average dropped 0.55% to settle at 33,734.88.

All three major indexes posted losses for the week, with the S&P 500 down 1.16%, the Nasdaq declining 0.92%, and the Dow shedding 1.96%, marking its worst weekly performance since March.

The Labor Department’s June jobs report showed that nonfarm payrolls increased less than expected, signaling a slowdown from May. The economy added 209,000 jobs, while the unemployment rate stood at 3.6%. Economists surveyed by Dow Jones had anticipated the addition of 240,000 jobs and a similar unemployment rate.

Commodity

Oil prices experienced a significant increase, reaching a nine-week high on Friday. Despite concerns about potential interest rate hikes impacting economic growth and oil demand, supply worries and technical buying outweighed those fears. Brent futures rose by 2.6% to settle at $78.47 a barrel, while U.S. West Texas Intermediate crude (WTI) rose by 2.9% to settle at $73.86.

Meanwhile, gold prices rose and were set to record their first weekly gain in four weeks. The weakening of the dollar and bond yields following weaker-than-expected U.S. nonfarm payrolls data raised doubts about the pace of interest rate hikes beyond July. Spot gold was up 0.8% at $1,926.54 per ounce, with a 0.4% increase for the week. U.S. gold futures settled 0.9% higher at $1,932.50.

The release of the labor department’s data showing below-expectation nonfarm payrolls numbers contributed to the retreat of benchmark 10-year U.S. Treasury yields from a four-month peak. The weaker dollar, down 0.9% to a two-week low, increased the attractiveness of gold for holders of other currencies.

 

The above analysis is only for the views of market researchers and is for reference only and is not regarded as a specific investment suggestion.

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