US stock markets looked set for a rough ride next week after Friday’s disappointing jobs report underpinned fears that the economy’s already tepid growth is slowing.
The much-awaited labor data for last month showed dull job generation for the third consecutive month — at 80,000 jobs, far below what is needed to reduce the 8.2 percent unemployment rate.
Stocks fell sharply as the weak hiring raised alarms the struggling three-year-old recovery from deep recession is petering out under pressure from Europe’s debt crisis.
Adding to the uncertainty for employers was the November presidential election and the automatic spending cuts and tax hikes that kick in at the end of year, analysts said.
“Continuing concern over slow growth in the global economy was the likely culprit for the weak jobs number in June,” Paul Ausick at 24/7WallSt.com said. “The worse news is that those concerns are only likely to get worse in the second half of the year as the US approaches both the presidential election and the fiscal cliff looming at the end of the year.”
The markets pared heavy losses in late trade, wrapping up a week shortened by Wednesday’s public holiday.
The Dow Jones Industrial Average finished at 12,772.47 points, down 0.84 percent from a week ago.
The S&P 500 index, a broad measure of the markets, fell 0.55 percent over the week to 1,354.68.
The tech-rich NASDAQ closed the week in positive territory, with a small gain of 0.08 percent at 2,937.33.
A warning on slowing global growth from IMF Managing Director Christine Lagarde also hit sentiment on Friday. Lagarde said the IMF would cut its growth forecast in its global outlook to be released later this month.
The week’s economic calendar got off to a gloomy start after the Institute for Supply Management (ISM) reported US manufacturing fell for the first time in three years last month.
Later in the week, the ISM reported growth in the massive services sector slowed last month.
Tomorrow brings the unofficial beginning of second-quarter earnings season, with aluminum giant Alcoa reporting results after the markets close.
The economic calendar will lighten up. International trade will be in focus on Wednesday, as well as the minutes of the US Federal Reserve’s last meeting of its policy-setting Federal Open Market Committee (FOMC).
“The May trade data will help set expectations for Q2 growth, while the minutes of the June FOMC meeting will likely garner the most attention,” Nomura analysts said.
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
Six Taiwanese companies, including contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), made the 2025 Fortune Global 500 list of the world’s largest firms by revenue. In a report published by New York-based Fortune magazine on Tuesday, Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), ranked highest among Taiwanese firms, placing 28th with revenue of US$213.69 billion. Up 60 spots from last year, TSMC rose to No. 126 with US$90.16 billion in revenue, followed by Quanta Computer Inc (廣達) at 348th, Pegatron Corp (和碩) at 461st, CPC Corp, Taiwan (台灣中油) at 494th and Wistron Corp (緯創) at
NEW PRODUCTS: MediaTek plans to roll out new products this quarter, including a flagship mobile phone chip and a GB10 chip that it is codeveloping with Nvidia Corp MediaTek Inc (聯發科) yesterday projected that revenue this quarter would dip by 7 to 13 percent to between NT$130.1 billion and NT$140 billion (US$4.38 billion and US$4.71 billion), compared with NT$150.37 billion last quarter, which it attributed to subdued front-loading demand and unfavorable foreign exchange rates. The Hsinchu-based chip designer said that the forecast factored in the negative effects of an estimated 6 percent appreciation of the New Taiwan dollar against the greenback. “As some demand has been pulled into the first half of the year and resulted in a different quarterly pattern, we expect the third quarter revenue to decline sequentially,”
RESHAPING COMMERCE: Major industrialized economies accepted 15 percent duties on their products, while charges on items from Mexico, Canada and China are even bigger US President Donald Trump has unveiled a slew of new tariffs that boosted the average US rate on goods from across the world, forging ahead with his turbulent effort to reshape international commerce. The baseline rates for many trading partners remain unchanged at 10 percent from the duties Trump imposed in April, easing the worst fears of investors after the president had previously said they could double. Yet his move to raise tariffs on some Canadian goods to 35 percent threatens to inject fresh tensions into an already strained relationship, while nations such as Switzerland and New Zealand also saw increased
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