Sign in Subscribe
Computer industry

Stocks End Week Lower as Decent Data Raises Rate Hike Chances

Strategic Insights

— 1 min read

Stocks ended the week sharply lower as investors interpreted the week's decent economic data as a sign that the Federal Reserve may raise interest rates in September. The data included a 215,000 increase in nonfarm jobs in July, a manufacturing index for July that came in below expectations, and a service PMI that rose to 55.7. In contrast, the Institute for Supply Management's manufacturing index fell short of expectations, and the unemployment rate remained steady at 5.3%.

Key Takeaways:

  • The nonfarm jobs report showed a 215,000 increase in July, falling short of the expected 225,000 jobs.
  • The unemployment rate remained steady at 5.3%, as expected.
  • The Institute for Supply Management's manufacturing index for July came in at 52.7, below the consensus forecast for a reading of 53.5.
  • The service PMI rose to 55.7 in the final July print, matching expectations.
  • Markit's manufacturing index for July came in at 53.8, matching expectations.
  • Personal income rose 0.4% in June, while consumer spending rose 0.2%, both matching expectations.
  • The trade balance report showed a deficit of $43.8B, versus expectations for a deficit of $43B in June.
  • The Bank of Japan left monetary policy unchanged, as expected, while the Bank of England kept its bank rate at 0.5% and maintained the stock of purchased assets financed by the issuance of central bank reserves at GBP 375B.
  • Shares of Disney (DIS) fell after the company reported lower than expected quarterly revenue and reduced its cable network guidance.
  • NVIDIA (NVDA), Sprint (S), Kellogg (K), Regeneron (REGN), and Michael Kors (KORS) all advanced after reporting on their just completed quarters.

Statistics:

  • The unemployment rate remained at 5.3% in July.
  • Nonfarm jobs increased by 215,000 in July.
  • The Institute for Supply Management's manufacturing index for July came in at 52.7.
  • Markit's manufacturing index for July came in at 53.8.
  • The service PMI rose to 55.7 in the final July print.
  • Personal income rose 0.4% in June.
  • Consumer spending rose 0.2% in June.
  • The trade balance deficit in June was $43.8B.

Sources:

  • TheFlyOnTheWall.com
  • COMTEX

Read more