Monthly Federal job additions is always the core U.S. and global macro fundamental

lifting or lowering earnings forecasts, across the broad S&P500 share price index. Our Chief Equity Strategist and Economist, John Blank, is here now to expand on that now.

The monthly U.S. Federal job additions are always a core macro fundamental, in particular lifting or lowering earnings forecasts, across the broad S&P 500 share price index.

Now the latest government data had some interesting implications for the economy, in terms of civilian labor force additions and job losses at one large-cap stock.

Plus, we’ll examine the impact of this jobs data on S&P 500 earnings forecasts for this year.

We’ll also discuss the recent sell-off that pushed the S&P 500 into correction territory. Have we seen the bottom or is there more downside ahead?

And we’ll look at how the recent Fed rate news is affecting the markets, especially near term.

Three large cap stocks, experiencing major share price momentum runs, of late include JD.com (JD), Coinbase (COIN) and Robinhood Markets (HOOD).

We’ll analyze these stocks now, starting with a new high in 2023 for the share price of U.S. e-commerce and physical retail giant JD.com.

Despite the recent turbulence in the markets, there are still some bright spots to watch out for.

As we approach the second half of 2023, it’s clear that the macro environment is constantly shifting, impacting everything from employment to inflation.

To discuss this further, we have Chief Equity Strategist and Economist, John Blank, with us now.

1. What did the latest job additions data reveal about the state of the civilian labor force in the U.S.?

The latest government data revealed that the U.S. added 244,000 jobs in July, exceeding expectations and following June's revision up to 228,000 additions (from 208,000).

Moreover, May's job additions were revised down to 157,000 from 144,000.

The unemployment rate rose to 3.8% from June's 3.6%, while economists had anticipated a reading of 3.7% and no change in the jobless rate.

Additionally, the labor force participation rate dropped to 62.3% from June's reading of 62.4%, and economists had expected a reading of 62.3%.

2. Were the DOGE job cuts, announced recently, reflected in those numbers?

Yes, it's worth noting that after the latest government data was released, one large-cap stock saw a notable share price pull back, while two other stocks saw some share price gains.

The stock that experienced a pull back was DOGE, due to the company announcing a new round of job cuts.

Earlier this year, in February, the stock rose around 100% from the lows hit during the 2022 bear market.

However, since then, the stock has pulled back around 50% from the highs reached in March 2023.

Meanwhile, two other stocks saw some gains. One was COIN, as the crypto market saw some strength in July, following the recent lows in Bitcoin.

The other stock that saw gains was HOOD, as the stock had slid around 50% during the bear market, but recently recovered to break back above the key $10 share price level.

3. How did this impact the share market pull backs we witnessed recently, in particular, pulling the S&P 500 share price index into correction territory?

The recent sell-off that pushed the S&P 500 into correction territory was largely driven by rising interest rates and concerns over a potential recession.

As we approached the second quarter of 2023, there was a sense that the market was anticipating some slowdown in economic activity, which ultimately came to pass.

The U.S. economy contracted at a 2.4% rate in the first quarter, after preliminary estimates showed a 1% decline.

Economists had anticipated a reading of 2.3%, compared to the prior quarter's 0.7% contraction, which was revised down from 0.9%.

The main driver of the contraction was a 13.3% drop in government spending, while economists had expected a reading of 0.7%, following the prior quarter's 6.3% increase.

However, despite the contraction, the market was pricing in a slim chance of no Fed rate hike at the July meeting, and the S&P 500 share price index rose around 15% in the first half of 2023.

But as we approached mid-July, the market was pricing in a nearly 100% chance of a 25 bps rate hike at the July meeting, and the S&P 500 pulled back