U.S. equities and stock exchange traded funds slid as a weak jobs report from the private sector and an ongoing rout in the fixed-income market drag on sentiment.
The ADP National Employment Report revealed private employers added 158,000 jobs in June, compared to estimates of 185,000 new additions, signaling some cooling in the labor market that is near full saturation, reports Tanya Agrawal for Reuters.
The report acts as a barometer for the monthly non-farm payrolls data, which includes both private and public sector data.
“The market moves significantly on the jobs report. We are expecting to see a little bit of a rebound from last month, but again we didn’t get that in the ADP number today which was also expected to be stronger than what it was,” Lindsey Bell, investment strategist at CFRA Research, told Reuters.
Meanwhile, U.S. Treasuries continued to sell off, along with European government bonds, on weak demand for French debt, which fueled anxiety that spilled over to U.S. equities, Bloomberg reports.
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Yields on benchmark 10-year notes jumped about 25 basis points across nine sessions to 2.38% as a sell off comes in response to a growing number of central banks from Asia to Europe and the U.S. taking a more hawkish stance and seeking to remove nearly a decade of accommodative measures.
“There is a near-unanimous view coming out of central banks for an unwinding of this unconventional policy, either through interest rate rises or pulling back on quantitative easing, or in the United States, selling down some of the central bank holdings,” Paul Flood, multiasset portfolio manager at Newton Investment Management, told the Wall Street Journal. “People have finally woken up to the fact there’s not a backstop, a forced buyer in the marketplace anymore.”
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