Markets are mixed after a sluggish jobs market report

Dow was off 61, advancers over decliners 3-1 & NAZ gained 62.  The MLP index added 2+ to 294 & the REIT index crawled up 1 to the 377s.  Junk bond funds edge higher & Treasuries were heavily purchased which lowered yields (more below).  Oil slid lower in the 82s & gold surged 40 to 2374.

Dow Jones Industrials 

Hiring by US companies slowed more than expected in Jun, pointing to a labor market that is continuing to cool in the face of higher interest rates, according to the ADP National Employment Report.  Companies added 150K jobs last month, missing the 160K gain that was predicted & down from the revised 157K figure in May.  At the same time, the report showed that wage growth, a key driver of inflation, dropped slightly to 4.9%, the slowest pace of growth since Aug 2021.  For workers who changed jobs, wages climbed 7.7%, down from the 7.8% increase recorded in May.  Job growth was almost entirely concentrated in the services sector, with goods producers contributing just 14K jobs to the total.  Hospitality& leisure accounted for the bulk of the gains, adding 63K new jobs.  Job growth beyond that sector was mostly anemic.  The construction industry added 27K workers in Jun, followed by professional & business services with a gain of 25K.  There were also sectors that saw notable declines last month.  Natural resources & mining shed 8K jobs, while manufacturing lost 5K.  "Job growth has been solid, but not broad-based," said Nela Richardson, ADP chief economist.  "Had it not been for a rebound in hiring in leisure and hospitality, June would have been a downbeat month."  The weaker-than-expected report comes in the wake of an aggressive tightening campaign by the Federal Reserve, which has raised interest rates to the highest level since 2001.  Traders are watching the labor market closely for signs that it is finally cooling, so the Fed can pivot to cutting interest rates.  Central bank officials have indicated that rate cuts will begin later this year but cautioned they need to see more evidence that inflation is returning to their 2% target.

US private job growth slows in June to just 150,000, worse than expected

The 10-year Treasury yield retreated for another session after weak economic data.  The yield on the 10-year Treasury dropped by around 7 basis points to 4.364% & the 2-year Treasury yield was last at 4.685%, sliding by about 5 basis points.  Yields & prices have an inverted relationship, so falling yields mean higher prices for Treasuries & 1 basis point equals 0.01%.  The 10-year yield took a leg down following economic releases today signaling that the labor market is cooling.  ADP data showed weaker private payroll growth than expected in Jun, while weekly claims for unemployment benefits came in higher than economists forecast.  The latest numbers are a prelude to Fri's closely watched nonfarm payroll report for Jun.  Bond yields across the board declined later after ISM services data came in notably below expectations.  This data added to growing concerns that the US economy is slowing down.  The bond market closes early today & will remain dark tomorrow for the Fourth of July holiday.  This afternoon, traders will watch for minutes from the policy-setting Federal Open Market Committee's Jun meeting.

10-year Treasury yield tumbles after weak economic data

Ford (F) sales rose 1% during the 2nd qtr over the year-earlier period, led by a 5% gain in truck sales, the automaker said.  Ford truck sales, which includes pickups & vans, totaled 309K vehicles during the period, the company’s best 2nd-qtr performance for the category since 2019.  Sales in its F-Series totaled 199K vehicles.  Sales of Ford electric vehicles totaled 24K during the 2nd qtr, up 61%.  The automaker said its EVs, in particular the Mustang Mach-E & F-150 Lightning, are drawing new customers to the company.  Meanwhile, sales of hybrid vehicles totaled 54K, an increase of 56% & a new quarterly sales record for Ford since it began offering hybrid models more than 20 years ago.  Automakers including Ford have been leaning on hybrids to ease the EV transition & help achieve tightening federal fuel efficiency standards.  Auto industry forecasters including Cox Automotive & Edmunds expect 2nd-qtr sales industrywide to be roughly flat year over year.  The stock lost a penny.

Ford sales edge 1% higher in the second quarter, led by trucks

The markets will close early today, ahead of tomorrow's holiday.  Hopes are growing for an interest-rate cut even as the Fed chair once again signaled a lack of urgency to act.  Traders are pricing in 65% odds of a move lower in Sep, according to CME's FedWatch tool.  Meanwhile gold is seeing significant demand.