2019年7月7日星期日
 
專家論市
Martin Hennecke

It pays to keep a close eye on US jobs data
 
05/07/2019
 
<p>The Dow Jones Industrial Average and the Nasdaq Composite index closed at record highs Wednesday as investors hung on to the hope that the Federal Reserve will cut interest rates at the end of this month.</p><p>With the US stock market closed for July 4, the Hang Seng Index was within touching distance of 29,000 yesterday but just too sluggish to get there.</p><p>The market remains in wait-and-see mode, and that is showing up in weak turnover.</p><p>US employment data, released Friday night, is the next signpost investors are looking out for.</p><p>If the results are way below expectations, that is still good news for Wall Street as it will be a chance to again speculate on the likelihood of a rate cut by the end of July.</p><p>Even if US Treasury yields continue to trend down, indicating downward risks for the economy but also reflecting the market&#39;s belief that the United States will soon enter into rate-cutting cycle, investors still don&#39;t have full confidence that the Fed is ready to embark on this cycle, with just three weeks to go before the end of the month.</p><p>If the jobs data is not so satisfactory, a rate cut will certainly be on the way.</p><p>US private payrolls increased by 102,000 in June after a nine-year low of 41,000 in May, according to ADP Research Institute data released Wednesday. That is far below the expected 140,000.</p><p>Now, the market is turning to look at the more economically representative nonfarm payroll number, which should see a noticeable increase in numbers from the 75,000 recorded in May, given that a 160,000 rise has been forecast.</p><p>With the employment data&#39;s release this time round quite close to the Fed&#39;s monthly interest rate roundtable, whether all that translates into the cut that some are expecting or an earnings opportunity or a time for them to cut back on spending largely depends on the figures coming out on Friday night in the United States.</p><p>If nonfarm payroll employment increase is below or far below the prime level of 160,000, it will be another shot in the arm for the bullish US stock market.</p><p>However, there is still a risk on the flip side.</p><p>For if the data is in line with expectations, or even better, that would be a bane for Wall Street, as the market has been looking forward eagerly to a rate cut.</p><p>If it is, an adjustment period awaits in the US bourse, and investors should prepare for that.</p><p>My column late last week was entitled &quot;Endgame near for stock-bond battle.&quot;</p><p>The battle between bonds and stocks is still going on, with both rallying.</p><p>Besides bonds, gold is continuing to be seen as a safe-haven asset, with its price on an upward trajectory.</p><p>What is happening at the moment has been crystallized by some investors as a &quot;buy everything&quot; stage.</p><p>Once the current trend loses its appeal - as it will, for example, if the Fed doesn&#39;t cut rates at the end of this month - both the bond and stock markets would be faced with reverse &quot;sell everything&quot; trades.</p><p>It is absolutely necessary for investors to safeguard against such a scenario.</p><p>Moreover, US stocks are going to enter results season.</p><p>The market is presently worried about the impact of the trade war.</p><p>But that risk is not as potentially devasating as that flowing on from a Fed monetary policy change.</p>

上一篇新聞 : Silver bond rateremains at 3pc
下一篇新聞 : $26,500 MPF boon for workers
 

 

 
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