Stocks Bounce After Nonfarm Payrolls Disappoint

US Nonfarm Payrolls (142K vs street 165K, previous revised down to 89K from 114K) and Average Hourly Earnings (3.8% vs street 3.7%), were disappointing once again, suggesting the US may be falling into a recession and increasing pressure on the Fed to deliver a rate cut on September 18th. On this news, treasury yields have accelerated their overnight declines with the US 10-year treasury note yield sliding below 3.70% to its lowest level since early 2023.

Canadian employment bounced back less than expected (22K street 26K), all of which came from an increase in part-time jobs while full time jobs decreased, which adds support to the Bank of Canada’s third rate cut announcement from earlier this week.  

US index futures have bounced since the news and have been cutting overnight losses. The three main contracts are currently down 0.3% to 0.8% with NASDAQ futures once again leading the way lower. Europe is also in retreat with the Dax down 0.5% and the FTSE down 0.2%. Energy and metals, however, are doing better today with US Crude Oil and Copper both up 0.8%. The US Dollar has weakened since the nonfarm numbers came out Gold is now up 0.5%, while majors like the Euro and Loonie are now up 0.2%.

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