The New York Stock Exchange (NYSE) drops without addressing concerns about austerity despite strong economic indicators such as private employment indicators.
The Dow Jones 30 industrial average drops, closed at 34,577.04, down 23.34 points (0.07 percent) from the previous session on the New York Stock Exchange (NYSE).
The Standard & Poor’s 500 closed at 13,614.51, down 15.27 points (0.36 percent) from the previous session, while the tech-heavy Nasdaq closed at 13,614.51, down 141.82 points (1.03 percent) from the previous session.
As private employment approaches 1 million, expectations for the Ministry of Labor’s employment report, which will be released the next day, have been raised. If employment improves significantly, concerns grow that the Federal Reserve’s policy could be adjusted sooner than expected. If the Fed tightens faster than expected, this is negative for stock prices.
According to a U.S. employment report by ADP, a private employment information company, the private sector’s employment increased by 977,000 in May this year. The figure is well above 680,000 market forecasts compiled by the Wall Street Journal. Employment in the service sector surged by 860,000 amid a 128,000 increase in production-related employment, driving the overall positive trend.
Weekly unemployment indicators also hit the 300,000 mark for the first time since the beginning of the pandemic. The U.S. Department of Labor announced on the 3rd that the number of unemployment insurance claims fell by 20,000 last week to 385,000 (seasonal adjustment). It is the lowest since 256,000 during the week of March 14, 2020. This is an improvement from previous week’s (406,000 people) and forecast (390,000 people).
The dollar strengthened and the interest rate on government bonds rose as the indicators showed positive results. The 10-year bond rate rose to 1.622 percent from 1.591 percent the previous day.
Han Ji-young, a researcher at Kiwoom Securities, said, “The bearish pressure will be dominant due to the strong dollar and vigilance against U.S. employment indicators, which is a noticeable phenomenon and a factor that can optimize the Korean stock market in the medium term.”
