Search Mark
Home / Expert Opinion

Strong Jobs Report & Soft Landing

U.S. stocks closed mixed on Friday, 8th July 2022, with the Dow and S&P off small while the Nasdaq was up slightly after a strong June jobs report. 

Nonfarm payrolls rose 372,000 last month, following a revised 384,000 in May, a Labor Department report showed on Friday. The unemployment rate was unchanged at 3.6% as the pool of available workers shrank, and wage growth remained firm. 

Meanwhile, a drop in the participation rate corroborates many complaints about worker shortages and employers’ difficulty filling millions of open positions — a recipe for sustained wage pressures. 

The three major market indices finished higher for the week, with the Nasdaq Composite jumping 4.6%, the S&P 500 gaining 1.9%, and the Dow Jones edging 0.8% higher.  

Here are the closing levels on Friday, 8th July 2022:- 

 Last  Change %Change 
Dow Jones 31,338.15 -46.40. -0.15% 
S&P 500 3,899.38 -3.24. -0.08% 
Nasdaq Comp 11,635.31 +13.96. +0.12% 
U.S. 10Y 3.08%   
VIX 24.64 -1.72 -5.52% 

Investors may have backed off a bit from overriding recession fears, as the strong jobs report and a recent sharp decline in prices for oil and other commodities allowed for a somewhat higher possibility that the U.S. economy could achieve a soft landing.  

However, with the Fed now almost certain to hike by 75 basis points, and stay on course for more hikes, it could be a mistake to discount a recession.  

Lower oil and commodities prices, plus the inverted yield curve in U.S. 2s vs 10s in my opinion, are actually suggesting a recession is looming. Some say a recession is already here

Once again, the market has decided to react to the positive side of data and managed to prevent a selloff on the back of a stronger than expected jobs report. 

This will be the battle going forward, be it seeing a soft landing or recession. 

Judging from the way the market traded on Friday, it looks like the soft-landing group is in the lead. 

With earning season going into full swing starting next week, we should get a clearer picture of the soft landing or recession debate.

While it was a relief to avoid a selloff on Friday, it may be premature to call a bottom just yet. 

Source: CBOE, Bloomberg

This commentary is written by James Gomes 
James has been in the finance industry for over 30 years and most recently worked for a large U.S. bank for more than 20 years. 

Risk Disclosure   
Trading in financial instruments involves high risks due to the fluctuation in the value and prices of the underlying financial instruments. Due to the adverse and unpredictable market movements, large losses exceeding the investor’s initial investment could incur within a short period of time. The past performance of a financial instrument is not an indication of its future performance.  Investments in certain services should be made on margin or leverage, where relatively small movements in trading prices may have a disproportionately large impact on the client’s investment and the client should therefore be prepared to suffer significant losses when using such trading facilities.   

Please make sure you read and fully understand the trading risks of the respective financial instrument before engaging in any transaction with Doo Prime’s trading platforms. You should seek independent professional advice if you do not understand any of the risks disclosed by us herein or any risk associated with the trade and investment of financial instruments. Please refer to Doo Prime’s Client Agreement and Risk Disclosure Statement to find out more. 

This information is addressed to the general public solely for information purposes and should not be taken as investment advice, recommendation, offer, or solicitation to buy or sell any financial instrument. The information displayed herein has been prepared without any reference or consideration to any particular recipient’s investment objectives or financial situation. Any references to the past performance of a financial instrument, index, or a packaged investment product shall not be taken as a reliable indicator of its future performance. Doo Prime and its holding company, affiliates, subsidiaries, associated companies, partners, and their respective employees, as well as managers, make no representation or warranties to the information displayed and Doo Prime and its holding company, affiliates, subsidiaries, associated companies, partners and their respective employees, as well as managers, shall not be liable for any direct, indirect, special or consequential loss or damages incurred a result of any inaccuracies or incompleteness of the information provided. Doo Prime and its holding company, affiliates, subsidiaries, associated companies, partners, and their respective employees, as well as managers, shall not be liable for any direct, indirect, special, or consequential loss or damages incurred as a result of any direct or indirect trading risks, profit, or loss arising from any individual’s or client’s investment. 

Share to

Expert Opinion

Tech Surge Lifts S&P 500 And Nasdaq To New Heights, Fed Policy In Focus

The S&P 500 held above the 5,000 level, extending its record high, driven by a rally in megacap tech stocks, including Nvidia, Microsoft, Amazon, and Alphabet.

2024-2-13 | Expert Opinion

Record Highs Driven By Jobs Surge And Tech Rally

U.S. stocks extended their record-setting trend as the S&P 500 and Dow achieved new closing highs, driven by a robust jobs report that boosted confidence

2024-2-5 | Expert Opinion

U.S. Stocks Reach All-Time High On Rate Cut Speculation

The week concluded on a positive note for U.S. stocks, marking all-time highs as speculation surrounding a potential Fed interest rate cut boosted confidence

2024-1-22 | Expert Opinion