By James Langton
(July 7 – 09:00 ET) – The market’s focus is on jobs reports on both sides of the border today. U.S. Nonfarm Payrolls for June were tipped for a consensus gain of 295,000, but the number came in up just 11,000. Private sector jobs jumped by about 200,000, while government jobs dropped after 190,000 census workers were laid off.
The unemployment rate, as expected, dropped to 4% from 4.1%. Average hourly earnings rose by 0.4% , or 5¢, edging the annual rate up to 3.6%, as expected. Both private and public sector employment slowed. Traders took this as good news on the basis that the slowing seems to be intact.
In Canada the jobs report was weaker than expected, with employment down 14,100. Full-time jobs were weak, led by the goods sector. The service sector rose 0.2%. The unemployment rate was unchanged at 6.6%.
Economists are warning that the slowing may still be illusory, with tighter conditions returning later in the summer. For now though most traders are taking it as a positive, and analysts maintain that the tightening rate cycle is at or near an end.
In Europe stocks are mixed. Telecoms are strong, but drugs are weighing on the market. London’s FTSE is off 16 points to 6,403. In France the CAC 40 is up 31 points to 6,484. The German DAX has added seven points to 6,958.
No major M&A news today. However the Wall Street Journal is reporting that Merrill Lynch & Co. is considering cutting 2,000 jobs, or 5.4% of its workforce, from its brokerage unit.
In Asia markets closed up together for the first time this week. Japan’s Nikkei added 116 points to 17,398. The Hang Seng added 340 points to 16,829.