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It’s jobs day, Trump doubles down on TikTok, and stimulus talks all but collapse.
Today’s jobs report is expected to show 1.48 million new positions were added during July – a significant slowdown from the pace of job creation in June, and very far short of what is needed to make up the loss of 22 million in March and April. The unemployment rate is forecast to have fallen to 10.5%, with the data published at 8:30 a.m. Eastern Time. There have been mixed signals coming into this report, with Wednesday’s ADP number coming in well below estimates, while yesterday’s claims number suggested the labor market is starting to firm.
TikTok tick tock
President Donald Trump signed a pair of executive orders, coming into force in 45 days, which prohibit U.S. residents from doing business with Chinese-owned TikTok and WeChat apps. The move coincides with a White House push for the sale of TikTok to an American company. The video sharing app said in a statement that it will pursue all remedies available, including the U.S. courts. Shares in WeChat parent Tencent Holdings Ltd. plunged as much as 10% before paring those losses after an official said the ban would only apply to doing business with WeChat, and not the entire tech conglomerate.
There has been no progress on agreeing a new stimulus plan for the U.S. economy, with talks now on the brink of collapse. Treasury Secretary Steven Mnuchin said that the White House and Democratic leaders remain “very, very far apart on significant issues.” House Speaker Nancy Pelosi called a proposal from the Trump administration “anorexic.” It is unclear if the two sides will meet again today. President Trump said yesterday that he will sign executive orders extending enhanced unemployment benefits and imposing a payroll tax holiday if no agreement on a broader package is reached.
Trump’s move against Chinese tech companies threatens to derail this week’s rally in global equities which has put the S&P 500 Index within 1.1% of its all-time closing high. Overnight the MSCI Asia Pacific Index dropped 0.7% while Japan’s Topix index closed down 0.2%. In Europe, the Stoxx 600 Index had slipped 0.2% by 5:50 a.m. with oil and gas companies the biggest drag on the gauge. S&P 500 futures pointed to a lower open ahead of payrolls data, the 10-year Treasury yield was at 0.523% and gold retreated.
After the jobs report at 8:30 a.m., we get June wholesale inventories data at 10:00 a.m. The latest Baker Hughes rig count is at 1:00 p.m. and consumer credit for June is at 3:00 p.m. Boston Fed President Eric Rosengren will testify to the Senate on the Federal Reserve’s Main Street Lending Program, which has been criticized for its slow rollout. Dish Network Corp. and Icahn Enterprises L.P. report today, with Berkshire Hathaway Inc. announcing results tomorrow.