In this context the index Dow Jones of Industrials fell 0.5% to 40,755.75 points and the S&P500 0.3% to 5,503.41 points, while the Nasdaq The Composite Index gained 0.2% to 17,127.66 points.
Private payrolls fell short of expectations
The US private payrolls rose less than expectedraising concerns about the health of the economy. The increase was 99,000 jobs in August, compared with a downwardly revised total of 111,000 in July, according to the payroll processor (ADP), the weakest month for the figure since January 2021. Economists had forecast an increase of 144,000 for the eighth month of the year.
For its part, the The number of Americans filing for first-time unemployment benefits was 227,000 in the week ending August 31, a decrease of 5,000. from the previous week’s revised level of 232,000. Forecasts had seen the figure in line with last week’s opening mark of 231,000.
The data, which comes ahead of Friday’s nonfarm payrolls report, has reaffirmed bets on further Fed rate cuts.
“As a result of the confluence of disappointing data reports, investors anticipate a growing possibility of a more aggressive monetary policy response, including a Possible 50 basis point cut in September, which is now estimated at 45% with a total of 111 basis points in policy easing expected by year-end,” Stifel Investment Banking said in a note Thursday.
The topic of the moment and another opinion from the Fed
“The Federal Reserve will have to cut interest rates to protect the US labor market, but The size of the cut will likely be influenced by incoming economic data“San Francisco Fed President Mary Daly told Reuters.
In an interview with the news agency on Wednesday, Daly indicated that The “real interest rate” is rising in a “slowing” economynoting that this is a “basic recipe for over-fitting.”
He argued that If the Fed’s monetary policy became “too restrictive” it could lead to a “further slowdown” in the employment outlook American. “In my opinion, that would not be welcome,” the official stressed.
The comments come as the Fed prepares to hold its next two-day policy meeting on Sept. 17-18. Investors are widely expecting the central bank to cut borrowing costs, which are currently at a 23-year high, from 5.25% to 5.5%, or 25 basis points.
Policymakers have kept rates at this elevated level for more than a year, having implemented a series of hikes throughout 2022 and 2023 in an attempt to contain red-hot inflation.
Recent figures have pointed to a gradual weakening of the US labour market, with job openings, in particular, falling to a three-and-a-half-year low in July.
However, Daly said job posting data shows that The labor market is not weak, but balancedadding that “it is difficult to find evidence that he is even weakening.”
What happened to the stocks?
Verizon fell 0.7% after agreeing to buy Frontier Communications in a deal worth $20 billion. The move is expected to help the telecom giant grow its fiber network to compete against rivals such as AT&T.
US Steel rose more than 2%after a significant drop on Wednesday. The US steelmaker has been under pressure following reports that US President Joe Biden is prepared to block its proposed $14.9 billion takeover by Japan’s Nippon Steel due to national security concerns.
Hewlett Packard Enterprise Company fell 6% as its fourth-quarter increase was overshadowed by a decline in margins pressured by the mix shift to servers.
JetBlue Airways Corp rose more than 8% and raised its third-quarter forecast, predicting revenue will range from -2.5% to +1% from the same period last year.
Tesla Inc rose more than 4% after the electric vehicle maker said it would launch its advanced driver assistance in Europe and China in the first quarter of 2025.
Paramount Global under new ownership
CBS’s parent company, Paramount Global to be controlled by software billionaire Larry Ellison after a group led by his son David completes its purchase of the Redstone family’s stake in the film and television company, Bloomberg News reported Thursday.
The elder Ellison will own 77.5 percent of National Amusements, the controlling shareholder of Paramount Global, through a trust and a series of corporations, according to a filing with the U.S. Federal Communications Commission, the report said.
David Ellison’s Skydance Media signed a deal in July to acquire Paramount Global in a complex two-step process, with his father, the co-founder of Oracle Corp (NYSE:ORCL), backing the proposal.
Skydance and its partners in the deal, including RedBird Capital Partners, will acquire National Amusements for $2.4 billion in cash. Skydance will subsequently merge with Paramount, offering $4.5 billion in cash or stock to shareholders and adding an additional $1.5 billion to Paramount’s balance sheet.
Source: Ambito
