While you were sleeping: US jobs openings hit record

Thursday 8th September 2016

Wall Street was mixed as investors tried to assess whether the US economy is growing at a pace that will warrant the Federal Reserve to raise interest rates this month.

US economic activity continued to expand at a modest pace on balance during the reporting period of July through late August, the Federal Reserve said in its Beige Book. Most districts reported a "modest" or "moderate" pace of overall growth.

“The economic data that’s come out in the past week or so has been underwhelming,” Walter Todd, chief investment officer for Greenwood Capital Associates in South Carolina, told Bloomberg. “There was a little hype about the Fed moving in September, but now we’re back to where we were a month ago, questioning whether they’re going to raise at all this year.”

However, others disagree amid evidence of strength in the jobs market. A Labor Department report showed that job openings rose 228,000 to a seasonally adjusted 5.9 million in July, a record high.

"There are millions of jobs going begging right now in what has got to be one of the biggest mismatches between skills and lack of qualified help available in the nation's history," Chris Rupkey, chief economist at MUFG Union Bank in New York, told Reuters. "The economy seems strong enough to weather a rate hike.”

The Federal Open Market Committee begins its next two-day meeting on September 20.

Wall Street was mixed. In 3.29pm trading in New York, the Dow Jones Industrial Average fell 0.1 percent. The Nasdaq Composite Index gained 0.1 percent. In 3.14pm trading, the Standard & Poor’s 500 Index slipped 0.04 percent.

Shares of Apple gained, reversing earlier losses, as the company revealed its new iPhone and watch. The stock traded 0.6 percent higher at US$108.35 as of 3.40pm in New York, after sliding as low as US$107.07 earlier in the session.

"Every other release tends to be a better release. Most people’s two-year contracts are nearing the end, so I think the iPhone 7, just from a replacement basis, will be a successful launch," Mike Binger, senior portfolio manager at Gradient Investments in Minneapolis, told Reuters.

“We’re in good shape for a nice sales cycle here, so I’m encouraged.”

The Dow moved lower as declines in shares of Wal-Mart and those of Home Depot, both recently down 1 percent, outweighed advances in shares of Caterpillar and those of Visa, last up 1.8 percent and 0.9 percent respectively.

Shares of Whole Foods dropped, trading 5.4 percent weaker as of 3.37pm in New York, amid concern about the outlook sparked by an full-year earnings estimate downgrade from rival Sprouts Farmers Market.

The downgrade reflects “the impact of significant ongoing deflation, the stepped-up promotional environment and our cautious outlook for the remainder of the year,” Sprouts said in a statement.

Shares of Sprouts sank, trading 13.6 percent weaker as of 3.41pm in New York.

In Europe, the Stoxx 600 Index ended the day with a gain of 0.3 percent from the previous close. The UK’s FTSE 100 Index rose 0.3 percent, while Germany’s DAX index and France’s CAC 40 index both gained 0.6 percent.

BusinessDesk.co.nz

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