(Bloomberg) – Return to robust US labor market growth was scared in stock futures, with traders worried that the Federal Reserve has less reason to lower interest rates.
September contracts at S & P 500 slipped as much as 0.5% after settling on a record high Wednesday. Strategists and investors said they were not sure whether adding 224,000 jobs to non-farm wages would change President Jerome Powell's stimulus thinking.
Delores Rubin, a leading stock trader at Deutsche Bank Wealth Management
] An "immediate response was a July cut is out of the table, but the futures reaction shows that this is not, The real question is that there are other data points between now and the Fed meeting that show enough signs of weakness that allow the Fed to be familiar with a price cut. July 4th holiday on a Friday that not so many investors are around, which will make today's movements more exaggerated. "
Lindsay Bernum, Macro Capital at Smith Capital Investors
" This is one of the difficult things because the market priced in the Fed cuts so there may be two reactions: one that allows the Fed to stay on hold and not cut in July, which can sometimes be negative for venture capital but generally can the V be a short-lived movement, as the market need to reproduce Fed cuts. Overall, the strong foundation that the United States is still in through employment, the consumer and getting through some of the temporary disturbances we've had overall should be positive for venture capital. There may be a temporary hiccup as the market reprices, but a strong foundation should be good for venture capital. "
Peter Boockvar, Chief Investment Officer at Bleakley Financial Group
" Let's be honest people, this rise to record heights in stocks has been about hope of easing, easing, easing, because the economic data of recent weeks have been weak. While job data is a delayed indicator and should not be taken as a clear signal at all, it can definitely keep and push the relaxation, relaxation, relaxation. "
Tony Bedikian, CEO and Leader of Global Markets at Citizens Bank
" Today's job report shows that the US economy continues to create jobs at a fast pace even when we enter the longest period of economic expansion on record. The spray back in June job number can splash cold water on the notion of an impending Fed rate cut. We need to see if the stock markets can push it away when balanced against other macroeconomic factors, such as Hoping for a Chinese trading gun. "
Quincy Krosby, Marketing Director at Prudential Financial Inc.
" This leads to questions about whether the Fed will be so committed to assessing cutbacks at the July meeting. President Powell goes up to Capitol Hill for his testimony, of course he will be asked about monetary policy. The question is, will he begin to go back with his remarks, which led the market to believe in a 100% chance of a rate cut later this year. The Fed's futures will withdraw slightly. "
Dennis Debusschere, leader of Evercore ISI's portfolio strategy
" This continues the cross-flow scenario the Fed has to deal with. One major question is that they must eradicate how much of the other economic data was weaker – and we saw a couple – had to do with trade and not the state of the economy. Almost the best salary number you want to ask in the ground, from a risk-based point of view, that is, strong in the labor market, but nothing in the figure suggests that the Fed should change the course from the light bias. "
– With help from Sarah Ponczek.
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