Traders Raise Bets On Aggressive Rate Cuts As US Economy Sees 818,000 Jobs Revised Away: 7 ETFs React To Employment Data
Portfolio Pulse from Piero Cingari
The U.S. labor market's job gains were revised down by 818,000, affecting market expectations for Fed rate cuts. This led to a fall in the U.S. dollar and mixed reactions in ETFs, with utilities and gold miners rallying, while financials and oil declined.
August 21, 2024 | 3:58 pm
News sentiment analysis
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NEGATIVE IMPACT
The United States Oil Fund (USO) fell more than 1% after the employment data release, reflecting a decline in growth-sensitive commodities like oil.
Revised job data suggests slower economic growth, negatively impacting oil prices and USO.
CONFIDENCE 90
IMPORTANCE 65
RELEVANCE 75
NEGATIVE IMPACT
The Invesco DB USD Index Bullish Fund ETF (UUP) erased earlier gains as expectations for aggressive Fed rate cuts increased, leading to a negative reaction in the U.S. dollar.
The downward revision in job gains increased expectations for Fed rate cuts, which typically weaken the dollar, negatively impacting UUP.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
The Financial Select Sector SPDR Fund (XLF) dropped sharply following the employment data release, reflecting market concerns over economic growth.
Financials are sensitive to economic growth expectations, and the revised job data suggests a slower growth outlook.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80
NEUTRAL IMPACT
Despite a positive reaction in gold prices, the SPDR Gold Trust (GLD) remained in negative territory, down 0.2% after the employment data release.
Gold prices typically rise with expectations of rate cuts, but GLD's negative position suggests other market factors at play.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
The VanEck Gold Miners ETF (GDX) flipped from session losses to gains, reflecting a positive reaction in gold miners to the employment data revision.
Gold miners benefit from higher gold prices, which are expected with rate cut bets, boosting GDX.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
The Materials Select Sector SPDR Fund (XLB) saw gains following the employment data release, indicating a positive market reaction in the materials sector.
Materials sector may benefit from expectations of lower interest rates, boosting XLB.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
The Utilities Select Sector SPDR Fund (XLU) saw gains as utilities rallied following the employment data revision, benefiting from rate cut expectations.
Utilities often benefit from lower interest rates, which are expected following the job data revision.
CONFIDENCE 85
IMPORTANCE 65
RELEVANCE 75