{"id":211353,"date":"2024-09-04T11:15:00","date_gmt":"2024-09-04T15:15:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/campus\/?p=211353"},"modified":"2024-09-06T03:35:56","modified_gmt":"2024-09-06T07:35:56","slug":"job-openings-plunge-amidst-yield-curve-de-inversion","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/job-openings-plunge-amidst-yield-curve-de-inversion\/","title":{"rendered":"Job Openings Plunge Amidst Yield Curve De-Inversion: Sep. 4, 2024"},"content":{"rendered":"\n

Stocks were deadcat bouncing before falling back into the red following heavy losses to start the month yesterday. Lending support to early equity gains were plunging interest rates, which are still flying south on the back of a substantial downside JOLTS miss. This softening of labor conditions has yield watchers dialing up the odds of a half percentage point reduction at the Fed\u2019s next meeting, which is only 14 days away. The main event for this week, however, will be this Friday\u2019s nonfarm payrolls, as Wall Street shifts its focus from inflation risk to growth fears.<\/p>\n\n\n\n

Job Openings Drop to 42-Month Low<\/strong><\/h2>\n\n\n\n

Adding further evidence of a decelerating US labor market, for-hire signs sunk to their most anemic level in 42 months. July job openings declined to 7.673 million, well below the median estimate of 8.09 million and June\u2019s 7.91 million. The figure, the lightest since January 2021, is generating optimism that the Fed will provide liquidity relief, but such exuberance is being countered by pessimism concerning economic growth.<\/p>\n\n\n\n

\"Job<\/figure>\n\n\n\n

Canada Enacts Third Rate Cut<\/strong><\/h2>\n\n\n\n

Diving further into monetary policy accommodation, the Bank of Canada delivered its third consecutive trim of its key benchmark this morning. The institution reduced its interbank borrowing cost to 4.25% on the back of slowing inflation, weakened conditions and tempered economic activity.<\/p>\n\n\n\n

Bulls Have Mixed Success<\/strong><\/h2>\n\n\n\n

Markets this morning were recovering from yesterday\u2019s selloff, but investors remained on high alert as indicated by elevated volatility, a brief de-inversion across 2s and 10s, plunging oil prices, a strengthening yen and a weakening greenback. Major stock indices were uniformly green but are now mixed with the Russell 2000 and Dow Jones Industrial benchmarks up 0.2% and 0.1%, while both the Nasdaq Composite and S&P 500 gauges are down 0.1%. Sectoral breadth is still brightly positive, though, with 9 out of 11 segments moving north amidst a defensive tilt. Upside gains are being led by utilities, communication services and consumer staples, which are up 1%, 0.5% and 0.4%. The laggards are comprised of energy and healthcare, which are lower by 0.3% and 0.1%. Treasurys are catching a bid once again as the curve shifts in bull steepening fashion, with the 2- and 10-year maturities changing hands at 3.801% and 3.795%, 6 and 4 basis points (bps) softer on the session. Lighter yields and aggressive Fed easing expectations are weighing on the greenback, however, as Japanese monetary authorities are open to further hikes. The Dollar gauge is down 41 bps as the US currency depreciates relative to all of its major counterparts, including the euro, pound sterling, franc, yen, yuan and Aussie and Canadian dollars. Commodities are also losing ground for the most part, with lumber, crude oil, copper and gold down 1%, 0.3%, 0.2% and 0.1%, but silver is up 0.4%. WTI crude is trading at $69.95 per barrel even as OPEC+ discusses delays to its planned supply increase slated for October. Market participants are sniffing out this flip-flop as an indication of weakening demand conditions and are selling the critical liquid in response.<\/p>\n\n\n\n

Retailers Bemoan Weak Household Finances<\/strong><\/h2>\n\n\n\n

Retailers are warning of weakening consumer spending as household finances are stretched due to inflation and lofty financing costs, but Dick\u2019s Sporting Goods has bucked the trend of declining sales. Those are a few points from the following earnings highlights:<\/p>\n\n\n\n