U.S. Stocks Mixed As Unemployment Rate Drops To 10.2%S&P 500 futures are mixed in premarket trading as better-than-expected employment reports offset the increase in U.S. – China tensions.
U.S. President Donald Trump Bans U.S. Transactions With China’s ByteDance and Tencent
U.S. – China relations reached a new low when U.S. President Donald Trump signed executive orders which ban U.S. transactions with operators of TikTok and WeChat.
These executive orders will be effective in 45 days, providing Microsoft with time to conclude its negotiations regarding the purchase of TikTok’s U.S. operations.
China has already announced that it was opposed to the move and promised to defend its interests. However, it is not clear whether China will be able to retaliate given Washington’s dominance in the world financial system.
Another increase in U.S. – China tensions has put pressure on the world markets but the new portion of U.S. employment reports has managed to provide some support to U.S. stocks.
Unemployment Rate Declines To 10.2%
Non Farm Payrolls report showed that 1.76 million jobs were added in July while analyst consensus called for Non Farm Payrolls of 1.6 million.
Meanwhile, Unemployment Rate declined from 11.1% in June to 10.2% in July compared to analyst consensus of 10.5%.
Both reports were better than expected and provided immediate support to S&P 500 futures which managed to gain some ground after spending most of the morning in negative territory due to the increase of U.S. – China tensions.
It remains to be seen whether the reports will be able to provide enough support to stocks during the current trading session since the negative impact from the increase of U.S. – China tensions may prove to be very significant.
No Progress In Coronavirus Aid Package Negotiations
Republicans and Democrats continue to negotiate the terms of the new coronavirus aid package but it looks like the talks have stalled.
In case no deal is reached by the end of this week, Donald Trump will likely rely on executive orders to provide some support to workers until the consensus on the new stimulus package is reached.
However, the President’s powers are limited so the economy will still need a real deal between Democrats and Republicans to get the required support.
For a look at all of today’s economic events, check out our economic calendar.