Weak US jobs boost investor optimism

00:00:00: The week.

00:00:00: US jobs day arrived at the perfect time to ease pressure on U.S.

00:00:04: heels yesterday and support broader markets, the report wasn't enough to reverse a darkening mood across technology.

00:00:11: stuck so but it surely helped lift indices with limited technology exposures higher yesterday and some of them too fresh all-time high levels now.

00:00:21: what's the u.s market?

00:00:22: set to become quiet ahead off the july fourth holiday investors will likely spend last trading supportive macroeconomic news, alongside some encouraging developments in the AI space recently.

00:00:35: that also gave a boost to technology stocks overnight helping markets head into the weekend on quite positive note.

00:00:42: So welcome to Swissco.

00:00:45: daily market talk is Friday third of July.

00:00:49: I'm Ivika Skardyshkoja and we will try to make sense of why the Marquis are reacting, behaving in a way they do.

00:00:56: but before we do as always please keep that opinion on my own.

00:01:01: And this is not financial advice.

00:01:11: So yesterday's weak US jobs data echoed positively across the U.S government bonds and somehow neutralized a negative mood across technology stocks.

00:01:20: The US economy added fifty seven thousand new non-farm jobs in the month of June, past two months figures were revised lower as well And wages growth came in line with market expectations Of around point three percent month on month and three and half per cent growth year over year As expected while unemployment rate in the US but that's because of a decline in the participation rate.

00:01:47: So overall, data looks soft enough to encourage market to trim the Federal Reserve rate-high expectations for rest this year.

00:01:54: Investors still expect the Fed to hike one time with more than fifty percent chance for that happening as early as September.

00:02:03: The US two-year yield is holding about four point ten per cent mark as U.S.

00:02:07: crude also rebounds slightly from yesterday.

00:02:10: It's a US dollar per barrel, but remains calm near the US dollar level with no major headlines on the wire regarding peace negotiations between the US and Iran.

00:02:22: is good news.

00:02:22: And also, there are more news of increase or oversupply in key oil markets and tens of millions barrels of Iranian oil apparently sailing through the planet without a destination than worries about not having enough oil for coming weeks and months.

00:02:38: As such, the softer US jobs data combined with sustained decline in oil prices sent the U.S.

00:02:44: dollar lower across most major currencies.

00:02:47: yesterday Covered early week losses and console days near the one fourteen forty-five level, cable approached one thirty four mark while the dollar yen fell nearly one percent to one hundred sixty and sixty levels yesterday.

00:03:03: The move was also supported by Katayama's commands that they remain ready to intervene directly into the FX markets.

00:03:13: Gold on the other hand, jumped to a US dollar per ounce level from below the four thousand dollars earlier this week.

00:03:22: that decreased opportunity because of holding non-interest bearing gold and make gold appetite better.

00:03:29: Overall, the latest weakness in U.S.

00:03:31: jobs data and softening inflation expectations may reset the Fed's expectation to a slightly less hawkish level but it will be at end of day upto the inflation data to reverse direction if they were reversed.

00:03:47: As such we can see the US dollar consul their latest gains with limited upside potential for gold and major currencies in the coming days.

00:03:56: until that inflation data.

00:03:58: And an ex-USCPI update is due on July the fourteenth, it will be determining whether Federal Reserve expectations not.

00:04:13: Inequities, most companies in the S&P five hundred reacted positively to soft u.s jobs data yesterday.

00:04:19: that led to a notable softening of U.S.

00:04:21: deals but index closed yesterday's trading session flat as the sell-off and technology space especially across my conductors counterweighted gains elsewhere.

00:04:32: And in this context The Technology Heavy Nasdaq Hundred Index for example tanked one point sixty one percenty yesterday.

00:04:38: But in contrast the Dow Jones Industrial Index rallied to a fresh all-time high level.

00:04:46: Elsewhere, the technology poor has stuck at six hundred and FTSE is also jumped with the former advancing to an all time high level itself.

00:04:55: And futures are in the past of this morning as software fit expectations After the Fed, after the US dollar.

00:05:03: The weaker inflation pressures elsewhere that come from the strength of the U.S.

00:05:07: dollar.

00:05:07: and the letter is just good news at a time when energy prices come down on the decline looks sustainable.

00:05:15: now Good news except for the tech because technology's dealing with its own demons these days.

00:05:20: the chip makers For example to get hit in yesterdays trading session On news that again we talked about yesterday that meta was stepping into the cloud business which was taken as a sign of potential excess capacity across the technology companies, while Oracle also warned that some highly leveraged clients may fail to pay their due to company in coming months and years pointing at open AI.

00:05:47: But don't worry you can.

00:05:48: since then news changed today so just an OpenAI could give it five percent stake for US government!

00:05:54: An Anthropic is reportedly in talks to develop a chip with SongSong.

00:05:58: That letter is up to nine percent today and in reflection, Cosby Index is preparing to close the session with a more than five-percent rebound but also within three per cent loss over the week.

00:06:11: There's little doubt that the technology story will continue to stay on headlines for the softness of inflation expectations around the world as yields could slow the technologies hell off into coming days and direct capital to less technology.

00:06:25: heavy Indices, indeed the S&P-Five Hundred's Equal Weighted Version for example is narrowing its latest gap with technology heavy and market cat weighted version by expected letter to continue at eventually slow potential losses on index level.

00:06:42: that would be due to a technology weakness.

00:06:44: Now That being said I will finish this week With some uncomfortable news For everybody.

00:06:49: According To The Latest Environmental Reports Google And Amazon Actually Use A record amount of energy and printed a Record amount of emissions due to the AI boom.

00:07:02: There's nothing surprising there in numbers.

00:07:04: googles electricity demand John thirty seven percent compared last year, and this water consumption saw at thirty five percent.

00:07:12: data centers were of course responsible for the soaring consumption of resources.

00:07:17: Amazon's greenhouse emissions rose sixteen percent on the other hand.

00:07:21: So what's striking to me is that Marcus enthusiasm has been exceptionally strong for smart conductors but nowhere as strong for natural resources.

00:07:31: The price action, for example in oil and gas was disrupted by the Middle East situation But before that they were trending lower than clean energy related assets have being ga- gaining and gaining momentum during the energy crunch as well, but they have pulled lower following re-opening of the Strait of Formas.

00:07:48: While Uranium and related SS which had been rising last year has been unable to maintain last years positive momentum The global exteranium ETF for example lost almost a third of its value since January peak.

00:08:02: It's becoming increasingly clear that if AI infrastructure continues to expand at current pace Demandful natural resources will keep rising as well, unless and until SpaceX eventually moves data centers into orbit where abundant solar energy and a cold vacuum of space could dramatically reduce their energy and cooling needs.

00:08:24: We will have to wait before we get that point.

00:08:26: if ever they are stuck on this planet.

00:08:29: so As we remain stuck here, assets related natural resources that all scars both traditional and clean energy sources look under owned by investors Today, take copper for example which is essential for electrification and difficult to replace.

00:08:45: And has been a strong and accelerating uptrend yes since the middle of two thousand twenty-two with beginning off two thousand Twenty three thanks to data center demand.

00:08:55: yet if you're looking at the corporate gold ratio that ratio Has been falling steadily over the same period Overshadowed by Gold's strong strong rally.

00:09:06: That means that copper did not benefit from gold-like inflows that were boosted by central bank demand, but also boosted a fair amount of speculative longs.

00:09:15: So when thinking about which pockets off the market could become next beneficiary of AI boom?

00:09:21: Which swore the next way will hit while energy and metals needed to power data centers deserve some serious attention.

00:09:30: So this is all for this week.

00:09:32: I'm Yipega Oskar Deshkuya and thank you for joining me, And Thank You For All Your Beautiful And Supportive Comments!

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00:10:14: So having said that I'm wishing a good day trading at a lovely weekend.

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