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BLOOMBERG
Stocks extended losses and bond yields fell after a weaker-than-estimated US payrolls report helped make the case for the Federal Reserve to resume rate cuts.
S&P 500 futures fell 1.1%, suggesting the benchmark gauge will extend this week’s decline. Amazon.com Inc. tumbled as its underwhelming earnings introduced a note of caution amid a generally upbeat reporting season for tech megacaps. The yield on 10-year Treasuries declined two basis points to 4.36%. The dollar was little changed.
Corporate Highlights:
Apple Inc. reported its fastest quarterly revenue growth in more than three years, easily topping Wall Street estimates, after demand picked up for the iPhone and products in China.
Amazon.com Inc. projected weaker-than-expected operating income and trailing the sales growth of its cloud rivals, leaving investors searching for signs that the company’s huge investments in artificial intelligence are paying off.
Exxon Mobil Corp. and Chevron Corp. posted better-than-expected results after record oil production cushioned the impact of lower crude prices.
Days before a new ownership team takes control of the company, Paramount Global reported second-quarter earnings that beat analysts’ estimates, crediting lower costs and growth in streaming profit.
Coinbase Global Inc., the largest US crypto exchange, reported lower-than-estimated second-quarter revenue amid a drop in digital-asset market volatility.
BLOOMBERG
The 73,000 payrolls gain is weaker than all but two of the 76 forecasts in Bloomberg’s survey. There were a handful of projections at 75,000 though, almost nailing it.
The bond market likes the softer jobs figures. The two-year yield slides circa 8 basis points to 3.87% as swaps show odds of a quarter-point cut in September are back up to 60% from less than 40%.
At first glance, these numbers would support the argument that this labor market is slowing and becoming more vulnerable. Government employment declined, potentially showing the effects of federal spending cuts.
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