Stock market falls on surprise job numbers; Beverage Stick Pops

The major stock market indices fell sharply on Thursday morning. June ADP payrolls surprised investors with the biggest monthly gain since July 2022, stoking fears of more rate hikes.


ADP's private workforce was an unexpectedly high 497,000 compared to the Econoday consensus of 235,000. This compares to a much lower revised number of 267,000 employed in May.

The increase in June was driven by strong new hiring in the leisure and hospitality sector, with 232,000 new openings. Other strong areas were construction, transportation and utilities.

Initial jobless claims for the week ended July 1st were 248k, versus 245k expected and above the revised 236k the previous week. Vacancies in May were less than 9.824 million versus Econoday's estimate of 9.9 million.

The 10-year government bond yield rose 9 basis points to 4.04%, breaking above 4% for the first time since March. The CME FedWatch tool showed a more than 90% chance of a quarter-point rate hike at the Fed's July 26 meeting, higher than on Wednesday.

The jobs data gave investors more reason to believe that the Federal Reserve will hike rates at the July meeting and perhaps beyond.

Watch for the June jobs report on Friday at 8:30am ET. The estimate for non-farm payrolls is up 213,000 in June, well below the 339,000 figure in May. The number of private employees is expected to rise by 199,000 from 283,000 in May.

The Services Index from the Institute for Supply Management (ISM) rose to 53.9 in June from a forecast of 50.8. A score above 50 for the composite index shows that the service economy is expanding; below 50 indicates it is contracting.

Major indices lose over 1%

The Nasdaq fell 1.3% in the first hour of trading. The Dow Jones Industrial Average fell 1.4% and the S&P 500 lost 1.2%. The Russell 2000 underperformed, losing 2%.

The Invesco QQQ Trust ETF (QQQ), which tracks the Nasdaq 100, fell 1.2%.

The innovator IBD 50 ETF (FFTY) lost 2.4%, underperforming the market indices. Volume on the NYSE and Nasdaq was higher on Wednesday than at the same time.

Stock market events: Share signals profit-taking

Percentages of Facebook and Instagram parents metaplatforms (META) gained 0.5% after it launched its Twitter competitor, Threads, on Wednesday night. The new service quickly racked up 10 million signups.

Meta shares are expanded without a clear entry point.

IBD 50 stock Global-e Online (GLBE) rose 1.2% on strong volume to an 18-month high after Piper Sandler raised his price target to 54 from 38 and maintained his overweight stance. Shares are in the 20% gain zone on an undefined basis with a buy point of 34.82.

The Israel-based e-commerce platform company isn't profitable right now, but its losses are narrowing. Global-e Online has delivered consistent quarterly revenue growth of over 50% for eight quarters.

Stockbrokers: Restaurant chain rallies

Brilliant sport (GENI) was up over 12% in volume after the sportsbook and media company announced it will extend its multi-year partnership with the National Football League. The stock is above the 5% buy zone of a choppy basis with a buy point of 5.82.

Healthy food restaurant chain sweet green (SG) rose 5.2% after BofA Securities upgraded the stock to a buy from neutral and raised its price target to 17 from 9.

keurig dr Pepper (KDP) rose 1.8% after Morgan Stanley upgraded the beverage stock to overweight from equal weight and kept its price target at 36. The beverage stock regained its 50-day moving average but remains in an ongoing downturn. His relative strength rating is a pathetic 19.

HubSpot (HUBS) fell 3.4% after Piper Sandler downgraded the customer relationship management platform to neutral from overweight but raised its price target to 520 from 482.

HUBS fell below the 21-day exponential moving average.

For more stock market news, follow Kimberley Koenig on Twitter @IBD_KKoenig.


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