While you were sleeping: US job openings climb to record

Wednesday 7th June 2017

Wall Street was mixed a day before Brits head to the polls, former FBI Director James Comey testifies and European Central Bank policy makers gather.

Meanwhile, US Treasuries rose, pushing the yield on the 10-year note four basis points lower to 2.14 percent.

In 2.41pm trading in New York, the Dow Jones Industrial Average declined 0.06 percent. However, the Nasdaq Composite Index rose 0.08 percent. In 2.26pm trading, the Standard & Poor’s 500 Index slid 0.13 percent.

“There is not much scheduled today that could potentially inspire the markets as the main focus this week is on ‘Super Thursday,”’ Piotr Matys, a London-based currency strategist at Rabobank, wrote in a client note, according to Bloomberg. “Essentially, we brace for a volatile session on Thursday and Friday as at least one of those crucial events could trigger sharp moves in the markets.”

The Dow slid as declines in shares of Wal-Mart Stores and those of Walt Disney, recently down 1.8 percent and 0.8 percent respectively, outweighed gains in shares of Exxon Mobil and those of Chevron, recently up 1.4 percent and 1.1 percent respectively.

As if investors needed further confirmation of expectations that Federal Reserve policy makers will lift interest rates at their two-day meeting next week, a key metric offered exactly that.

The Labour Department's Job Openings and Labour Turnover Survey, or JOLTS, showed that US job openings climbed 259,000 to a seasonally adjusted 6.0 million in April, a record high.

"These data underscore the difficulty in hiring new workers, which we think is increasingly likely to be a factor restraining payroll growth going forward," John Ryding, chief economist at RDQ Economics in New York, told Reuters. "The Fed becomes somewhat uneasy when the labour market becomes too tight and this report supports the Fed's case to nudge rates higher next week."

In the latest US earnings data, shares of Michaels Companies tumbled, down 7.5 percent as of 2.49pm in New York, after the arts and craft retailer downgraded its earnings outlook because of the weakening Canadian dollar.

“The value of the Canadian dollar has weakened since we established our prior outlook, and we have adjusted our fiscal 2017 full year guidance to reflect our expectation this currency trend continues," Chuck Rubin, chief executive officer, said in a statement.

In Europe, the Stoxx 600 Index finished the day with a 0.7 percent retreat from the previous close. The UK’s FTSE 100 Index inched 0.01 percent lower, while France’s CAC40 Index declined 0.7 percent, and Germany’s DAX Index dropped 1 percent.

ECB President Mario Draghi is set to speak after the Governing Council meeting ends on Thursday.

“The Governing Council is likely to remain very cautious in its communication about the exit strategy in an environment where, despite the good growth performance, the outlook for inflation remains bleak,” Philippe Gudin, chief European economist at Barclays, told Bloomberg.

(BusinessDesk)

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