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You can find the current article at its original source at http://www.theguardian.com/business/live/2015/sep/04/business-live-jittery-markets-fall-us-jobs-report
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| Stock markets slide after 'mixed-bag' US jobs report - as it happened | Stock markets slide after 'mixed-bag' US jobs report - as it happened |
| (17 days later) | |
| 6.09pm BST | 6.09pm BST |
| 18:09 | 18:09 |
| Back with Greece, and here’s Reuters’ take on the latest opinion poll showing Alexis Tsipras’ Syriza party in second place to New Democracy: | Back with Greece, and here’s Reuters’ take on the latest opinion poll showing Alexis Tsipras’ Syriza party in second place to New Democracy: |
| Greece’s conservative New Democracy party has taken a tiny lead among voters over leftist Syriza before the September 20 election, an opinion poll published on Friday showed. | Greece’s conservative New Democracy party has taken a tiny lead among voters over leftist Syriza before the September 20 election, an opinion poll published on Friday showed. |
| New Democracy has rapidly closed the gap with Syriza in recent days, and the Metron Analysis poll on Friday was the second this week to show it overtaking former prime minister Alexis Tsipras’s party. | New Democracy has rapidly closed the gap with Syriza in recent days, and the Metron Analysis poll on Friday was the second this week to show it overtaking former prime minister Alexis Tsipras’s party. |
| Syriza is on course to get 23.4% of the vote while New Democracy would take 24%, the latest poll showed. Over 11 percent of respondents were undecided. | Syriza is on course to get 23.4% of the vote while New Democracy would take 24%, the latest poll showed. Over 11 percent of respondents were undecided. |
| Just a few weeks ago, a Syriza victory in the snap election had appeared almost certain... | Just a few weeks ago, a Syriza victory in the snap election had appeared almost certain... |
| The latest poll, conducted on behalf of the Parapolitika newspaper, showed New Democracy leader Evangelos Meimarakis, with his rating at 47%, was more popular than Tsipras, who was backed by 43%. | The latest poll, conducted on behalf of the Parapolitika newspaper, showed New Democracy leader Evangelos Meimarakis, with his rating at 47%, was more popular than Tsipras, who was backed by 43%. |
| #Greece poll [MetronAnalysis/@parapolitika]: ND 24 +2.8 Syriza 23.4 +1.2 KKE 5.2 GD 5.1 Potami 4.8 PASOK 4 EK 4 LAE 3.4 ANEL 2 | #Greece poll [MetronAnalysis/@parapolitika]: ND 24 +2.8 Syriza 23.4 +1.2 KKE 5.2 GD 5.1 Potami 4.8 PASOK 4 EK 4 LAE 3.4 ANEL 2 |
| On that note it’s time to close up for now, so once again thanks for all your comments and we’ll see you soon. | On that note it’s time to close up for now, so once again thanks for all your comments and we’ll see you soon. |
| 5.30pm BST | 5.30pm BST |
| 17:30 | 17:30 |
| European markets end with further losses | European markets end with further losses |
| Another volatile week finished with further woe for investors. Among the day’s data, German factory orders fell 1.4% month on month in July, but the big event was the US non-farm payroll numbers. As it turned out the headline figure disappointed, with 173,000 jobs added in August compared with the 220,000 or so expected. But the unemployment rate dipped to 5.1% and hourly wages were steady, so there were few clues as to whether the US Federal Reserve would raise interest rates this month or not. | Another volatile week finished with further woe for investors. Among the day’s data, German factory orders fell 1.4% month on month in July, but the big event was the US non-farm payroll numbers. As it turned out the headline figure disappointed, with 173,000 jobs added in August compared with the 220,000 or so expected. But the unemployment rate dipped to 5.1% and hourly wages were steady, so there were few clues as to whether the US Federal Reserve would raise interest rates this month or not. |
| Despite the turmoil caused by worries about China, many analysts believed there was nothing in the jobs data to prevent an increase. Equally, many others believed the Fed would keep its powder dry. The markets seemed to side with the hawks, especially since just before the figures were released, Richmond Fed president Jeffrey Lacker said the non-farm numbers should not derail the case for a rate rise. | Despite the turmoil caused by worries about China, many analysts believed there was nothing in the jobs data to prevent an increase. Equally, many others believed the Fed would keep its powder dry. The markets seemed to side with the hawks, especially since just before the figures were released, Richmond Fed president Jeffrey Lacker said the non-farm numbers should not derail the case for a rate rise. |
| So the upshot was another slide in shares, with the final scores showing: | So the upshot was another slide in shares, with the final scores showing: |
| On Wall Street, the Dow Jones Industrial Average is currently 292 points or 1.8% lower. | On Wall Street, the Dow Jones Industrial Average is currently 292 points or 1.8% lower. |
| 4.58pm BST | 4.58pm BST |
| 16:58 | 16:58 |
| Meanwhile Moody’s has downgraded the senior debt ratings of four Greek banks to C, in the expectation that holders will suffer losses in the forthcoming recapitalisations. It said: | Meanwhile Moody’s has downgraded the senior debt ratings of four Greek banks to C, in the expectation that holders will suffer losses in the forthcoming recapitalisations. It said: |
| The downgrade...primarily reflects Moody’s expectation that junior and senior debt holders will be bailed in and sustain material losses as part of the upcoming recapitalisation process... | The downgrade...primarily reflects Moody’s expectation that junior and senior debt holders will be bailed in and sustain material losses as part of the upcoming recapitalisation process... |
| Although Moody’s expects uninsured depositors to be excluded from bail-in, as indicated by a recent Eurogroup statement, the negative outlook reflects the ratings agency’s opinion that the recapitalisation process remains fluid and banks continue to face significant credit risks. | Although Moody’s expects uninsured depositors to be excluded from bail-in, as indicated by a recent Eurogroup statement, the negative outlook reflects the ratings agency’s opinion that the recapitalisation process remains fluid and banks continue to face significant credit risks. |
| The banks are Alpha Bank, Eurobank Ergasias, National Bank of Greece and Piraeus Bank. | The banks are Alpha Bank, Eurobank Ergasias, National Bank of Greece and Piraeus Bank. |
| 4.49pm BST | 4.49pm BST |
| 16:49 | 16:49 |
| It may have been another volatile week but there is likely to be more to come. Tony Cross, market analyst at Trustnet Direct, said: | It may have been another volatile week but there is likely to be more to come. Tony Cross, market analyst at Trustnet Direct, said: |
| Any hopes that markets may have been through the thick of the volatility have been squarely dashed today with a combination of risk mitigation ahead of the long weekend in the US and concern as to what the Fed is supposed to do with interest rates serving to knock sentiment in markets on a global basis. London has been left nursing triple digit gains and it’s the commodity stocks that are bearing the brunt. | Any hopes that markets may have been through the thick of the volatility have been squarely dashed today with a combination of risk mitigation ahead of the long weekend in the US and concern as to what the Fed is supposed to do with interest rates serving to knock sentiment in markets on a global basis. London has been left nursing triple digit gains and it’s the commodity stocks that are bearing the brunt. |
| The fact that the US jobless rate has fallen to its lowest level since 2008 has reopened the idea that the Federal Reserve could push through higher interest rates in two weeks time. This will further punish emerging markets currencies and make dollar denominated goods – like oil and metals – more expensive for many. There can be no doubting that the Fed has an enormous weight on its shoulders – calling this wrong could have wide-reaching effects. | The fact that the US jobless rate has fallen to its lowest level since 2008 has reopened the idea that the Federal Reserve could push through higher interest rates in two weeks time. This will further punish emerging markets currencies and make dollar denominated goods – like oil and metals – more expensive for many. There can be no doubting that the Fed has an enormous weight on its shoulders – calling this wrong could have wide-reaching effects. |
| Next week may get off to a slow start with the US Labor Day holiday, but Chinese trade data on Tuesday will be closely watched. There’s no argument that the world’s second largest economy is slowing and that will affect the pace elsewhere, but the big question mark hangs over the speed of any contraction. | Next week may get off to a slow start with the US Labor Day holiday, but Chinese trade data on Tuesday will be closely watched. There’s no argument that the world’s second largest economy is slowing and that will affect the pace elsewhere, but the big question mark hangs over the speed of any contraction. |
| Also on Monday the Chinese stock market is set to reopen after its closure due to the World War II remembrance events. With Chinese authorities seemingly hinting at no more intervention to stabilise the markets, it could prove another tricky session. | Also on Monday the Chinese stock market is set to reopen after its closure due to the World War II remembrance events. With Chinese authorities seemingly hinting at no more intervention to stabilise the markets, it could prove another tricky session. |
| 4.14pm BST | 4.14pm BST |
| 16:14 | 16:14 |
| The US Federal Reserve could raise rates faster and further than people expect, according to John Higgins of Capital Economics: | The US Federal Reserve could raise rates faster and further than people expect, according to John Higgins of Capital Economics: |
| Given the lack of a clear steer from [today’s] report, we continue to think that the probability of US monetary policy being tightened later this month is around 50:50. The bigger picture, though, is that we still forecast that the Federal Open Market Committee will raise the federal funds rate further and faster over the next year or so than most expect, as a tightening labour market puts significant upward pressure on wage and core inflation. Indeed, the unemployment rate has already fallen to the mid-point (5.1%) of the “central tendency” of FOMC members’ latest projections of its longer-run level. | Given the lack of a clear steer from [today’s] report, we continue to think that the probability of US monetary policy being tightened later this month is around 50:50. The bigger picture, though, is that we still forecast that the Federal Open Market Committee will raise the federal funds rate further and faster over the next year or so than most expect, as a tightening labour market puts significant upward pressure on wage and core inflation. Indeed, the unemployment rate has already fallen to the mid-point (5.1%) of the “central tendency” of FOMC members’ latest projections of its longer-run level. |
| With this in mind, we think a big winner will be the dollar, as the contrast between the monetary policies of the Fed and other major central banks becomes increasingly stark. A big loser, though, could be Treasuries – even if term premiums remain low, there is plenty of scope for yields to rise as expectations for interest rates are revised up. Otherwise, while we anticipate that the US stock market will weather tighter monetary policy well, we think its upside will be capped by the squeeze on profit margins that results from diminishing slack in the labour market. | With this in mind, we think a big winner will be the dollar, as the contrast between the monetary policies of the Fed and other major central banks becomes increasingly stark. A big loser, though, could be Treasuries – even if term premiums remain low, there is plenty of scope for yields to rise as expectations for interest rates are revised up. Otherwise, while we anticipate that the US stock market will weather tighter monetary policy well, we think its upside will be capped by the squeeze on profit margins that results from diminishing slack in the labour market. |
| Updated | Updated |
| at 4.14pm BST | at 4.14pm BST |
| 4.04pm BST | 4.04pm BST |
| 16:04 | 16:04 |
| Here’s a couple of charts from the Bureau of Labour Statistics release: | Here’s a couple of charts from the Bureau of Labour Statistics release: |
| 3.36pm BST | 3.36pm BST |
| 15:36 | 15:36 |
| And here’s the positive version of the jobs data from the President’s twitter account: | And here’s the positive version of the jobs data from the President’s twitter account: |
| The economy added 173,000 jobs in August—a record-breaking 66 consecutive months of private-sector job growth. | The economy added 173,000 jobs in August—a record-breaking 66 consecutive months of private-sector job growth. |
| 3.20pm BST | 3.20pm BST |
| 15:20 | 15:20 |
| And this sums it up: | And this sums it up: |
| - Bank of Tokyo: "We would be shocked if Fed officials delay any further!’" - Goldman: "No hike" ... who to believe | - Bank of Tokyo: "We would be shocked if Fed officials delay any further!’" - Goldman: "No hike" ... who to believe |
| 2.59pm BST | 2.59pm BST |
| 14:59 | 14:59 |
| The market slide is accelerating: | The market slide is accelerating: |
| 2.54pm BST | 2.54pm BST |
| 14:54 | 14:54 |
| Meanwhile over in Greece, a new poll ahead of this month’s election and it’s not good news for former prime minister Alexis Tsipras and his Syriza party: | Meanwhile over in Greece, a new poll ahead of this month’s election and it’s not good news for former prime minister Alexis Tsipras and his Syriza party: |
| GREECE'S SYRIZA PARTY TO WIN 23.4 PERCENT OF VOTES AT SNAP ELECTION, NEW DEMOCRACY PARTY TO WIN 24 PERCENT - METRON ANALYSIS POLL | GREECE'S SYRIZA PARTY TO WIN 23.4 PERCENT OF VOTES AT SNAP ELECTION, NEW DEMOCRACY PARTY TO WIN 24 PERCENT - METRON ANALYSIS POLL |
| 2.46pm BST | 2.46pm BST |
| 14:46 | 14:46 |
| The jobs report muddies the monetary policy outlook, says Unicredit Research economist Harm Bandholz: | The jobs report muddies the monetary policy outlook, says Unicredit Research economist Harm Bandholz: |
| Fed Vice Chair Stan Fischer said during his Jackson Hole speech that “we now await the results of the August employment survey.” If he had hoped that the numbers will speak a clear language and basically make the decision for the FOMC – in the one or other direction – he will be disappointed... | Fed Vice Chair Stan Fischer said during his Jackson Hole speech that “we now await the results of the August employment survey.” If he had hoped that the numbers will speak a clear language and basically make the decision for the FOMC – in the one or other direction – he will be disappointed... |
| In our view, a generally risk-averse Federal Reserve does not want to risk to add to the uncertainty, and prefers to get a better sense of how the global headwinds might affect the US economy. | In our view, a generally risk-averse Federal Reserve does not want to risk to add to the uncertainty, and prefers to get a better sense of how the global headwinds might affect the US economy. |
| To be sure, that view is far from being shared by all [Federal Reserve] members. Only today, Richmond Fed President Lacker reiterated his view that the US no longer requires zero interest rates – a view that we fundamentally share. And Mr. Lacker will certainly dissent at the upcoming meeting, if the Fed leaves its target rate unchanged | To be sure, that view is far from being shared by all [Federal Reserve] members. Only today, Richmond Fed President Lacker reiterated his view that the US no longer requires zero interest rates – a view that we fundamentally share. And Mr. Lacker will certainly dissent at the upcoming meeting, if the Fed leaves its target rate unchanged |
| But while the hawks are usually more vocal, they in our view do not have the majority to get the rate hike just yet. Other voting regional Fed presidents, such as Charles Evans and Dennis Lockhart, will probably be more than happy to stand pat for now. Finally, in a divided Committee, it is up to the Chair to forge the Consensus. And while Janet Yellen has not spoken in public about the policy outlook since mid-July (!), her approach so far has always been to err on the side of caution. | But while the hawks are usually more vocal, they in our view do not have the majority to get the rate hike just yet. Other voting regional Fed presidents, such as Charles Evans and Dennis Lockhart, will probably be more than happy to stand pat for now. Finally, in a divided Committee, it is up to the Chair to forge the Consensus. And while Janet Yellen has not spoken in public about the policy outlook since mid-July (!), her approach so far has always been to err on the side of caution. |
| 2.39pm BST | 2.39pm BST |
| 14:39 | 14:39 |
| Wall Street opens sharply lower | Wall Street opens sharply lower |
| As expected, US markets have fallen back in the wake of the mixed jobs data. | As expected, US markets have fallen back in the wake of the mixed jobs data. |
| The Dow Jones Industrial Average is down 204 points or 1.27% in the first few minutes of trading, while the S&P 500 is 1.01% lower. | The Dow Jones Industrial Average is down 204 points or 1.27% in the first few minutes of trading, while the S&P 500 is 1.01% lower. |
| 2.34pm BST | 2.34pm BST |
| 14:34 | 14:34 |
| Meanwhile G20 finance ministers and central bankers, currently meeting in Turkey, will not call on the US to delay a rate rise, Reuters is reporting: | Meanwhile G20 finance ministers and central bankers, currently meeting in Turkey, will not call on the US to delay a rate rise, Reuters is reporting: |
| The U.S. Federal Reserve is coming under pressure from emerging markets not to raise rates too soon as turmoil in China threatens global growth, but the G20 will not publicly call for any delay, delegates meeting in Turkey said on Friday. | The U.S. Federal Reserve is coming under pressure from emerging markets not to raise rates too soon as turmoil in China threatens global growth, but the G20 will not publicly call for any delay, delegates meeting in Turkey said on Friday. |
| Slower growth in China and rising market volatility have boosted the risks to the global economy, the International Monetary Fund warned ahead of the G20 meeting. It cited a mix of potential dangers such as depreciating emerging market currencies and tumbling commodity prices. | Slower growth in China and rising market volatility have boosted the risks to the global economy, the International Monetary Fund warned ahead of the G20 meeting. It cited a mix of potential dangers such as depreciating emerging market currencies and tumbling commodity prices. |
| Finance ministers and central bankers from the Group of 20 leading economies were pressing for more on China’s plans to tackle its slowdown, delegates at the meeting in Ankara said. Emerging market economies are concerned that a U.S. rate hike on top of the Chinese turmoil would pile on extra pressure, they said... | Finance ministers and central bankers from the Group of 20 leading economies were pressing for more on China’s plans to tackle its slowdown, delegates at the meeting in Ankara said. Emerging market economies are concerned that a U.S. rate hike on top of the Chinese turmoil would pile on extra pressure, they said... |
| [But] a push by emerging market countries to characterise possible rate hikes in developed nations as a serious risk for the global economy was rejected by drafters of the G20 communique, a source from the Russian delegation said. | [But] a push by emerging market countries to characterise possible rate hikes in developed nations as a serious risk for the global economy was rejected by drafters of the G20 communique, a source from the Russian delegation said. |
| “Some emerging market countries wanted to fix a position,” the source told reporters, when asked whether the Fed’s expected rate hike would be mentioned in the communique... | “Some emerging market countries wanted to fix a position,” the source told reporters, when asked whether the Fed’s expected rate hike would be mentioned in the communique... |
| Another G20 source said the wording would probably not go beyond a general caution to central banks to bear in mind the consequences of policy shifts. | Another G20 source said the wording would probably not go beyond a general caution to central banks to bear in mind the consequences of policy shifts. |
| “There will be no open demand to the Fed to act,” the source told Reuters. | “There will be no open demand to the Fed to act,” the source told Reuters. |
| 2.25pm BST | 2.25pm BST |
| 14:25 | 14:25 |
| Take your pick. #NFP pic.twitter.com/M2h4dUPFBU | Take your pick. #NFP pic.twitter.com/M2h4dUPFBU |
| 2.24pm BST | 2.24pm BST |
| 14:24 | 14:24 |
| For all those believing the jobs data makes a rate rise this month less likely, there are others believing the opposite: | For all those believing the jobs data makes a rate rise this month less likely, there are others believing the opposite: |
| 34% chance of Sep hike from 30% yesterday | 34% chance of Sep hike from 30% yesterday |
| 2.20pm BST | 2.20pm BST |
| 14:20 | 14:20 |
| Markets selloff deepens after US jobs report | Markets selloff deepens after US jobs report |
| We warned earlier that a middling jobs report might not be good for markets. | We warned earlier that a middling jobs report might not be good for markets. |
| And it turns out we were right. Europe’s stock markets are falling deeper into the red, knocking at least 2% off the main indices. | And it turns out we were right. Europe’s stock markets are falling deeper into the red, knocking at least 2% off the main indices. |
| Wall Street is expected to fall back when it opens in 10 minutes. | Wall Street is expected to fall back when it opens in 10 minutes. |
| Investors are still anxious, because there’s still no clarity on whether the Fed will push the button on rate hikes. Nor is it any clearer whether the US economy is strong enough to take it. | Investors are still anxious, because there’s still no clarity on whether the Fed will push the button on rate hikes. Nor is it any clearer whether the US economy is strong enough to take it. |
| Marcus Bullus, trading director at MB Capital, says: | Marcus Bullus, trading director at MB Capital, says: |
| “It has been a turbulent fortnight and this latest jobs data will not assuage market fears. | “It has been a turbulent fortnight and this latest jobs data will not assuage market fears. |
| The August figure is an unconvincing start to the Fall and will trigger even more concern in the markets about the state of the global economy.” | The August figure is an unconvincing start to the Fall and will trigger even more concern in the markets about the state of the global economy.” |
| Here’s the damage in Europe right now: | Here’s the damage in Europe right now: |
| Updated | Updated |
| at 2.20pm BST | at 2.20pm BST |
| 2.19pm BST | 2.19pm BST |
| 14:19 | 14:19 |
| Millennials are still struggling to break into the labor market: | Millennials are still struggling to break into the labor market: |
| The share of prime age Americans (25-54 years old) who have jobs still has not increased at all this year. pic.twitter.com/LeWdueD7io | The share of prime age Americans (25-54 years old) who have jobs still has not increased at all this year. pic.twitter.com/LeWdueD7io |
| Updated | Updated |
| at 2.19pm BST | at 2.19pm BST |
| 2.09pm BST | 2.09pm BST |
| 14:09 | 14:09 |
| It may not feel like it, but the US economy has now achieved “full employment”. | It may not feel like it, but the US economy has now achieved “full employment”. |
| So says Paul Ashworth of Capital Economics: | So says Paul Ashworth of Capital Economics: |
| The decline in the unemployment rate leaves it in line with the Fed’s 5.0% to 5.2% estimate of the equilibrium long-run unemployment rate. | The decline in the unemployment rate leaves it in line with the Fed’s 5.0% to 5.2% estimate of the equilibrium long-run unemployment rate. |
| In short, the Fed just achieved the full employment part of its dual mandate. | In short, the Fed just achieved the full employment part of its dual mandate. |
| Admittedly, the participation rate remained at a depressed 62.6% and that decline in the unemployment rate was partly due to a 41,000 decline in the labour force last month. But it was notable that the wider U6 measure of unemployment also fell again, to 10.3% from 10.4%. | Admittedly, the participation rate remained at a depressed 62.6% and that decline in the unemployment rate was partly due to a 41,000 decline in the labour force last month. But it was notable that the wider U6 measure of unemployment also fell again, to 10.3% from 10.4%. |
| Ashworth also believes a September rate hike is 50:50 toss-up, given today’s “fairly mixed” report. | Ashworth also believes a September rate hike is 50:50 toss-up, given today’s “fairly mixed” report. |
| Updated | Updated |
| at 2.09pm BST | at 2.09pm BST |