US Stock Market Outlook: Strong Non-Farm Data Boosts Futures, Datadog Up 9% Pre-Market.
U.S. Job Market Update and Market Reactions
On Thursday morning, the U.S. reported a seasonally adjusted non-farm payroll increase of 147,000 for June, surpassing the market expectation of 110,000. The previous month's figure was revised from 139,000 to 144,000.
Unemployment Claims and Interest Rate Outlook
For the week ending June 28, initial unemployment claims were reported at 233,000, below the expected 240,000, with the prior value adjusted from 236,000 to 237,000. Following the non-farm payroll report, traders abandoned bets on a rate cut by the Federal Reserve in July, with the probability of a September rate cut now around 80%, down from 98% before the report.
Stock Market Movements
Major stock index futures rose slightly, with the Nasdaq up 0.3%. Notable tech stocks showed mixed results pre-market: ASML fell nearly 2%, while Tesla gained 0.45%. Chinese stocks also exhibited varied performance, with Alibaba down over 2% and Xpeng up more than 2%.
Cryptocurrency and Tech Stocks
Bitcoin returned to $110,000, with several cryptocurrency-related stocks rising pre-market. SharpLink Gaming (SBET) surged over 13%, and Bit Digital (BTBT) rose nearly 4%. The solar sector continued its upward trend, with First Solar (FSLR) up over 3% and VivoPower (VVPR) gaining over 7%.
Datadog Inclusion in S&P 500
Datadog (DDOG) saw a pre-market increase of 9% after being announced as a new component of the S&P 500, replacing Juniper Networks. This adjustment will take effect before the market opens on July 9.
Robinhood's Controversial Tokenized Stocks
Robinhood announced it would offer European users tokenized stocks of OpenAI and SpaceX valued at €5. However, OpenAI quickly issued a statement clarifying that it has no partnership with Robinhood and does not endorse these tokens, leading to a pre-market drop of over 2% for Robinhood (HOOD).
Semiconductor Sector Developments
Synopsys (SNPS) rose 4% pre-market after the U.S. lifted export restrictions related to China. The company is working to restore sales of previously restricted products.
Alibaba's Bond Issuance
Alibaba announced plans to issue approximately HK$12 billion in zero-coupon convertible bonds, which will not generate periodic interest. The funds will be used for general corporate purposes, including investments in cloud infrastructure.
Market Insights and Future Outlook
Anthony Bolton, a renowned fund manager, suggested that while the U.S. stock market may be nearing its peak, the Chinese market presents significant upside potential due to low bond yields. He emphasized the favorable conditions for a bull market in China.
As the market continues to react to economic indicators and geopolitical developments, investors are advised to stay informed and cautious.
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