Market briefing --- Bob (fast)
Nasdaq --- Julie (medium)
Job reports --- Moone (slow)
>> welcome back to “world financial report,” i’m bob bowden. recapping the day on wall street. we saw stocks moving lower across the board with the dow, s&p 500 and nasdaq all losing between 1% and 1.5% on the day. semiconductors kept the nasdaq afloat much of the day but eventually interest rate worries won out on that. julie hyman has details from the nasdaq marketsite in times square.
>> the nasdaq managed to hold on to its gains for much of the session until about 2:00 p.m. when it went from positive to negative and never managed to recover. it did seem that those interest rate concerns managed to take over investor sentiment today and one might expect, we saw those interest rate sensitive stocks lead declines in the market today and indeed in the week, as well. if you look at the week’s action as well as the day’s action, they closed near each other in terms of leading and losing groups. as for the week, we lost .1% in today’s session and banks and financials leading the decline because many banks that rely on mortgage lening have the most to lose with an interest rate rise so fifth ford and northern trust leading declines in financials, as well as ameritrade and t. rowe price. and transportation stocks some of the worst performers on the continuing rising oil prices. jetblue airways and j.b. hunt, a trucking company, losers in today’s session. what held back declines in the nasdaq much of the day were semiconductor stocks and the prices for the most widely used computer memory chips had the big jump today, biggest increase in about a month and people saying the jobs report signifying a good economy could be good for chipmakers. we saw the philadelphia semiconductor index rise as well as outperforming the nasdaq this week, companies like intel and maxim led gains among those companies today. back to you.
>> thank you, julie hyman. a check on u.s. treasuries now. we saw on the long end of the yield curve selling across the board, 10-year and five-year both down over a point on the day and yield on the 10-year up to 4.77%. checking the shorter end of the curve, similar selling action with the three-year and two-year notes down 21/32 and 15/32 respectively. in currency trading, the dollar rallying, euro finishing at $1.1883 and japanese yen 112.21 yen to the dollar. for a look at how bond investors react to today’s employment number we bring in our bloomberg news reporter joining me here onset. bonds under pressure today after hearing the jobs number. what are investors saying?
>> they felt vindicated by the number. if you look at the numbers, this number confirmed that the economy is strengthening and inflation, while tame right now, will probably rear its ugly head.
>> on the bloomberg professional% -service we’ve drawn the one-week chart of the price of the 10-year and a big drop today. not a surprise that the economy is improving. we’ve been having better initial weekly jobless claims numbers and the number for march was over 300,000, a blockbuster number.
>> but that was just one number and this is the mother of all reports, the report that everyone had been waiting for. we’ve had all these other numbers showing the economy is doing well and it’s gaining and the recovery is there and the fed’s telling everyone they’ll be patient until past tuesday when they say they’ll take measured steps. this report, for many investors, said the fed can’t take the measured steps as today, to highlight that further, we had almost half of the biggest wall street firms to basically say that the fed has to take action now.
>> tell me about where you see yields headed or those who talk to you see yields headed. this is a six-month yield on the 10-year and checking that right now almost 4.8%, a big upward rise here. but the question is how high will the bond guys expect the yield to go?
>> at year end because many people are taking bets now about what’s going to happen by the end of the year, the lowest forecast i saw was 5% and highest was 5.5% but basically they all agree that treasury yields are headed higher particularly as the economy gains and shows signs of strength and as they bet the fed will take action this year.
>> you say take action this year. most people betting on june or august or when?
>> following the jobs report, like i mentioned, almost half of the primary dealers saying the fed will have to move by june. if you look at fed funds futures, traders see a 92% chance they’ll take action in june.
>> the big lead-up, for several weeks, has been this number, the all-important jobs number. we finally had it now take us forward, what is the next people of economic data people are looking forward to next week?
>> they’ll look at the inflation reports with all three major inflation reports in terms of producer prices, consumer prices, import prices and in that same week the government will be selling more debt, $54 billion worth. and with those two combined, it will possibly weigh more on treasuries.
>> thanks to bloomberg’s monee fields white joining me onset. april’s strong employment report shows the economic recovery is now self-sustaining, and gary schlossberg with wells capital management joins us to talk about that and how sustaining it might be, how much growth the economy will experience after the break.
