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Wall Street follows global shares lower ahead of Fed notes, employment data

AP – Wall Street headed lower early yesterday ahead of the release of notes from the latest Federal Reserve (Fed) meeting and new jobs data out later in the week.

Futures for the benchmark S&P 500 index and the Dow Jones Industrial Average slipped 0.5 per cent before the bell.

Notes from the monthly Fed meeting at which its key interest rate was left unchanged were due for release. Fed officials said rates might be raised two more times this year, but traders hope they will decide enough already has been done to cool inflation.

Currency traders at a foreign exchange dealing room in Seoul, South Korea. PHOTO: AP

On Friday the United States (US) reports employment data for June, a day after data on weekly jobs and separately, job openings, are released.

“Interest rate expectations could be reshaped depending on how the cards fall with regards to these key releases,” said Tim Waterer of KCM Trade in a report.

The US labour market has weathered a more than year-long effort by the Fed to cool it – and the broader economy – by raising interest rates. Layoffs are historically low, job openings plentiful and the economy continues to add jobs at a healthy rate.

The Fed’s next interest rate decision comes later this month.

Shares of UPS slid over two per cent after contract negotiations broke down over night between the company and the Teamsters union representing some 340,000 UPS workers. Each side accused the other of walking away from negotiations. The current contract expires at the end of the month and Teamsters members last month voted in favour of a strike authorisation.

At midday in Europe, the FTSE 100 in London and the DAX in Frankfurt each lost 0.5 per cent, while the CAC 40 in Paris retreated 0.6 per cent.

In Asia, the Shanghai Composite Index fell 0.7 per cent to 3,222.94 after a measure of China’s service industry activity fell to its lowest level this year, adding to signs its recovery following the end of anti-virus controls is cooling.

The monthly purchasing managers’ index issued by a Chinese business magazine Caixin fell to 53.9 from May’s 57.1 on a 100-point scale on which numbers above 50 show activity increasing. A measure of factory activity
also declined.

“Without policy support, there’s a risk that weakening growth expectations could become self-fulfilling,” said Stephen Innes of SPI Asset Management in a report.

The Nikkei 225 in Tokyo retreated 0.2 per cent to 33,338.70 and the Hang Seng in Hong Kong lost 1.6 per cent to 19,110.38.

The Kospi in Seoul retreated 0.6 per cent to 2,579.00 and Sydney’s S&P-ASX 200 shed 0.4 per cent
to 7,253.20.

India’s Sensex lost 0.3 per cent to 65,301.84. New Zealand and Jakarta gained while Singapore and Bangkok declined.

China’s economic activity accelerated to 4.5 per cent in the first three months of 2023 from last year’s three per cent. China’s number two leader Premier Li Qiang said last month growth was improving. He gave no details but expressed confidence China can hit this year’s official growth target of “about five per cent”.

In energy markets, benchmark US crude rose USD1.47 to USD71.26 per barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the price basis for international oil trading, lost nine cents to USD76.16 per barrel
in London.

The dollar rose to JPY144.60 from Tuesday’s JPY144.46. The euro gained to USD1.0879 from USD1.0870.