DOW JONES FALLS AFTER SOLID JOBS DATA DAMPENS RATE CUT HOPES
DJ 30 futures are currently trading at 26930- lower by 0.21% as compared to the previous close. The contract, however, closed in the positive territory in the last trading session.
In the Cash Markets, the DJIA lost about 26 points at the time of writing. On Wednesday, the benchmark index gained 0.7% at to finish its trading day at 26,966-its first record close since 3rd October. U.S. equities dropped today after the release of better-than-expected jobs data which tempered hopes for easier Fed monetary policy.
The Philadelphia chip index dropped 0.8% after Samsung Electronics forecast a steep fall in its second-quarter operating profit.
Other top losers in the Dow Jones include 3M Co (down 1.97%), Merck & Co (down 1.25%), and Intel Corp (down 0.94%) at the time of writing.
Trading volumes are expected to be thin today as markets were closed on Thursday for Independence Day.
Meanwhile, Treasury yields rose after the solid jobs data. The U.S. benchmark 10-year Treasury note was yielding 2.041% at the time of writing. Bank stocks got a boost from the higher rates. Goldman Sachs and JP Morgan Chase gained 0.62% and 0.40% respectively at the time of writing.
The 30-stock index has gained more than 1% for the week heading into Friday’s session.
On the economic front, Nonfarm Payrolls for June released earlier today came in at 224K. Payrolls number was above the market expectation of 160K. Also, Payrolls number for the prior month was revised to 72K from 75K previously reported.
In addition, U.S. Unemployment rate for June also out today came in at 3.7%. The unemployment rate was above the consensus estimates of 3.6%.
On the technical front, the RSI is currently at 66.74% and suggests that the market can move in the downward direction. The current price is above the MA5. The current price is above the middle line of the Bollinger Bands but is heading downwards.
Overall Bias is Negative and Short-term trades can be initiated with tight Stop Loss and Take Profit targets.
Trade Suggestion-Limit Sell At 26940, Take Profit At 26870 Stop Loss At 26975