"Mini non-farm" suppresses US stocks and the US dollar, Nasdaq rises by over 1% before sharply narrowing, NIO surges by over 14%, RMB hits a 16-month high

The labor market data is mixed. In August, the US "small non-farm" added jobs unexpectedly decreased to 99,000, the lowest in three and a half years, and the data for July was revised down, indicating a sharp slowdown in the labor market. However, the initial jobless claims dropped to 227,000 people at the beginning of each week, and the number of continued unemployment benefit recipients also fell to the lowest level in nearly three months.

On the other hand, the US ISM non-manufacturing index expanded moderately for two consecutive months in August, and the final value of the Markit services PMI announced earlier was the highest in nearly two and a half years, easing concerns about an economic hard landing. This year, the Fed's Powell, chairman of the Federal Reserve Bank of San Francisco, said that the Fed needs to lower its policy rate because inflation is declining and the economy is slowing down.

After the release of the two employment data, US bond yields and the US Dollar Index (DXY) both fell in the short term and hit daily lows. Following the release of the two services PMI data, US bond yields and the US Dollar Index rose in the short term, and then hit daily highs. The market's bet on a significant 50 basis point rate cut by the Fed in September fell slightly from 44% to 41%, while the probability of a 25 basis point rate cut increased to 59%.

The market is focusing on the key non-farm payroll data on Friday to further confirm the extent of the rate cut. Economists generally expect that the number of new non-farm jobs added in August will be 160,000, higher than the 114,000 in July. The unemployment rate may slightly decrease to 4.2%.

As the panic of a hard landing in the US continues to escalate, today's release of the worst ADP private sector employment report since January 2021 further intensifies this panic.

Major US stock indices rose in early trading, then fell back, turned lower across the board at midday, with only the Nasdaq managing to turn higher later, but still significantly below the earlier rise of over 1%. Most indices closed at daily lows towards the end of the session, with the S&P and Russell indices falling for three consecutive days, while the Chinese concept index rose nearly 1% against the market trend. In terms of sectors, consumer discretionary stocks led the gains, with Tesla closing up 4.9%:

• Only Nasdaq rose among the three major US indices: The S&P 500 fell 0.3% to 5503.41 points. The Dow, closely related to the economic cycle, fell 0.54% or 219 points to 40,755.75 points. The tech-heavy Nasdaq rose 0.25% to 17,127.66 points. The Nasdaq 100 rose 0.05%. The Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of Nasdaq 100 tech stocks, was nearly flat. The more economically sensitive Russell 2000 index fell 0.61%. The fear index VIX fell 6.66% to 19.90.

The S&P 500 failed to rebound for three consecutive days

• Most US industry ETFs closed lower. Consumer discretionary ETFs and global aviation ETFs rose by over 1%. However, healthcare ETFs and financial ETFs fell by over 1%, regional bank ETFs, banking ETFs, and energy ETFs fell by close to 1%, while biotech index ETFs and daily consumer ETFs each fell by less than 0.5%

• S&P 500 index's 11 sectors saw more declines than gains. The healthcare sector fell by 1.39%, while the industrial and financial sectors fell by up to 1.18%. The materials and energy sectors fell by up to 0.8%, while the information technology/tech sector rose by 0.05%, ranking third. The telecommunications sector rose by 0.52%, and the consumer discretionary sector rose by 1.41%.
• " Tech Seven Sisters " with only Microsoft declining. Tesla rose by 4.9%, with the company expecting to provide full self-driving (FSD) in China and Europe in the first quarter of 2025, pending regulatory approval. Nvidia rose by 0.94%, Meta, known for the "metaverse," rose by 0.8%, Amazon rose by 2.63%, Google Class A rose by 0.5%, Apple rose by 0.69%, and Bank of America expects the upcoming iPhone launch event to boost Apple's stock price, while Microsoft fell by 0.12%.
• Most chip stocks declined. The Philadelphia Semiconductor Index fell by 0.6%; the industry ETF SOXX fell by 0.54%; Nvidia's double long ETF rose by 1.71%. Intel fell by 0.15%, considering selling a portion of its stake in the self-driving software company Mobileye. Applied Materials fell by 1.17%, Qualcomm fell by 0.47%, KLA fell by 2.29%, AMD fell by 1.02%, Broadcom fell by 0.84%, while Arm Holdings rose by 1.77%, Taiwan Semiconductor ADR rose by 1.76%, and Micron Technology rose by 0.11%.
• AI concept stocks saw more declines than gains. C3.ai fell by 8.21%, dropping by 18% at one point during the day, marking its largest decline since September 2023. Super Micro Computer fell by 2.09%, BigBear.ai fell by 2.88%, Dell fell by 1.74%, CrowdStrike fell by 1.11%, SoundHound AI, an AI voice company backed by Nvidia, fell by 0.22%, Palantir fell by 1.41%, Serve Robotics fell by 7.61%, while BullFrog AI rose by 5.96% and Oracle rose by 1.32%.
• Chinese concept stocks outperformed the US market. The Nasdaq Golden Dragon China Index rose by 0.88%. In ETFs, the China Technology Index ETF (CQQQ) rose by 0.63%, while the China Internet Index ETF (KWEB) fell by 0.04%.
• Among popular Chinese concept stocks, NIO rose by 14.39%, with Q2 revenue growing by 99% year-on-year. Q3 delivery guidance exceeded market expectations, and JP Morgan upgraded XPeng Motors ADR from neutral to overweight, raising the target price from $8 to $11.5. ZEEKR rose by 8.71%, XPeng rose by 4.74%, Li Auto rose by 0.48%, and Citi downgraded Li Auto's rating to neutral, citing performance risks below expectations next year Bilibili rose by 2.26%, New Oriental rose by 1.98%, Ctrip rose by 0.74%, Baidu rose by 0.52%, while Alibaba fell by 0.05%, Pinduoduo fell by 0.08%, Tencent Holdings ADR fell by 0.08%, Meituan ADR fell by 0.13%, Vipshop fell by 0.16%, NetEase fell by 1.24%, and JD.com fell by 1.68%.

• Other key stocks：(1) Broadcom's Q3 AI-related revenue fell short of expectations, with Q4 revenue guidance disappointing, dropping more than 5% after hours. (2) Electronic signature solution provider Docusign's second-quarter subscription revenue exceeded expectations, raising full-year revenue guidance, with the stock price falling more than 5% after hours. (3) Robot process automation software company Uipath's second-quarter report and full-year performance guidance better than expected, with the stock price rising more than 8% after hours. (4) Applied Digital, which received $160 million in financing from Nvidia, rose by about 66%, marking the largest single-day increase since May 2023.

Expectations of a U.S. economic recession intensify, European stock market falls for the fourth day:

The pan-European Stoxx 600 index fell by 0.54% to 512.05 points. Major sectors saw mixed performance, with utilities stocks rising by 1.66% while healthcare stocks fell by 1.4%. Among the components, Tiffany under LVMH Group will open three new stores in China by 2025.

The German stock index fell by 0.08%. The French stock index fell by 0.92%, the Italian stock index rose by 0.01%, the Spanish stock index rose by 0.53%, and the UK stock index fell by 0.34%.

On the "mini non-farm" release day, the yield on the 10-year U.S. Treasury bond fell by 2.45 basis points, with the 2/10-year yield curve briefly ending its third inversion in the past month, and the 2-year yield hitting a new low of over a year:

• U.S. Treasuries: By the end of the day, the more interest rate-sensitive 2-year U.S. Treasury yield fell by 0.62 basis points to 3.7476%, dropping to a daily low of 3.7106% after the ADP "mini non-farm" release, rebounding to a daily high of 3.7910% after the ISM non-manufacturing data release.
• The yield on the 10-year U.S. benchmark Treasury bond fell by 2.45 basis points to 3.7307%, dropping significantly after the release of U.S. ADP employment data at 20:15 Beijing time, hitting a daily low of 3.7194% near 21:55 before the release of U.S. ISM non-manufacturing index, rebounding close to the daily high of 3.7722% set at 17:09, leading to a downturn in U.S. stocks at midday.
• European bonds fell by about 2 basis points: The yield on the 10-year German bond in the euro area fell by 1.6 basis points, dropping significantly after the release of U.S. ADP "mini non-farm" employment data and hitting a daily low before the release of ISM non-manufacturing data The two-year German bond yield fell by 2.7 basis points. The French 10-year government bond yield fell by 2.1 basis points, the Italian 10-year government bond yield fell by 2.0 basis points, the Spanish 10-year government bond yield fell by 2.1 basis points, and the Greek 10-year government bond yield fell by 1.5 basis points. The two-year UK bond yield fell by 2.5 basis points, and the UK 10-year government bond yield fell by 2.0 basis points.

According to CCTV News, on September 5th local time, the German Ifo Institute pointed out that after a 0.3% economic contraction last year, Germany's economic growth will stagnate this year, with growth expectations for this year lowered by 0.4 percentage points and by 0.6 percentage points for 2025.

The U.S. bond yield fell for the third consecutive day, with the 10-year U.S. bond yield falling by 2 basis points to 3.73%. Apart from the sharp drop on August 5th (which quickly recovered), the yield has now returned to its lowest point since 2024.

The "mini non-farm" report caused the U.S. Dollar Index (DXY) to fall to a one-week intraday low. The U.S. ISM non-manufacturing data then caused the U.S. Dollar Index to briefly rise, ending the session down by 0.3%. Non-U.S. currencies rose across the board, with the Japanese Yen breaking through 143 to a one-month high and rising for three consecutive days. Offshore Chinese Yuan rose by 235 points to nearly a 16-month high, breaking 7.09 yuan:

• USD: The U.S. Dollar Index DXY, measuring against a basket of six major currencies, fell by 0.29% to 101.064 points. After the release of U.S. ADP employment data at 20:15 Beijing time, it plunged and hit a daily low of 100.964 points, then rebounded after the release of the U.S. ISM non-manufacturing index and briefly turned positive. For most of the day, it was in a downtrend, except for the volatility brought by the ISM data, showing an overall downward trend. It had previously fallen to 100.514 points on August 27th.
• Bloomberg Dollar Index fell by 0.19% to 1230.74 points. During the Asia-Pacific midday, it hit a daily high of 1233.12 points, remaining in a volatile downward trend for the rest of the day. After the U.S. stock market midday, it hit a daily low of 1230.20 points, approaching the bottom of 1221.94 points on August 26th.
• Non-U.S. currencies rose. The Euro against the U.S. Dollar rose by 0.26%, the British Pound against the U.S. Dollar rose by 0.24%, and the U.S. Dollar against the Swiss Franc fell by 0.27%. Among commodity currency pairs, the Australian Dollar against the U.S. Dollar rose by 0.23%, the New Zealand Dollar against the U.S. Dollar rose by 0.39%, and the U.S. Dollar against the Canadian Dollar fell by 0.02%.
• JPY: The Japanese Yen against the U.S. Dollar rose by 0.21% to 143.44 yen. Before the U.S. stock market opened, the Japanese Yen reached a high of 142.852, and the U.S. ISM non-manufacturing PMI data briefly caused the Japanese Yen to decline and hit a daily low of 144.23 yen
• Offshore Renminbi: The offshore Renminbi (CNH) rose by 235 points against the US dollar at the close, reaching 7.0899 yuan, the highest since May 2023, with overall trading ranging between 7.1144-7.0871 yuan during the session. Onshore Renminbi/USD rose by 0.3%, closing at 7.0888, also the highest since May last year.
• Cryptocurrencies Decline More Than Rise: The largest cryptocurrency, Bitcoin, fell by 3.51% at the close, to $56,305.00. The second largest, Ethereum, fell by 3.51% at the close, to $2,380.00, both hitting a one-month low.

Global economic recession concerns surged, overshadowing the OPEC+ decision to postpone production increases by at least two months, as well as the good news of US oil inventories falling to a new low in a year. Oil prices surged before falling to over 14 months low, with US oil rising over 2.3% before closing down by 0.07% , and Brent rising over 2% before closing down by 0.01% :

• US Oil: WTI October crude oil futures closed down $0.05, a decrease of 0.07%, at $69.15 per barrel, marking a new closing low since June 2023.
• Brent Crude: Brent November crude oil futures closed down $0.01, a decrease of over 0.01%, at $72.69 per barrel.
• Intraday Performance: There are reports that OPEC+ has reached a consensus to delay the planned increase in oil supply by two months. In addition, the EIA government version of the weekly crude oil inventory report showed a decrease of about 6.9 million barrels last week, to a new low since September last year. Influenced by both factors, US and Brent oil prices continued to rise, with US oil rising over 2.3% in early US trading to near $71 per barrel, and Brent rising over 2% to surpass $74 per barrel. However, fears of an economic recession sparked a surge in risk aversion, causing both oils to plummet sharply, with US stocks hitting daily lows in the afternoon, US oil falling by nearly 0.7% to below $69 per barrel, and Brent falling by nearly 0.5% to below $72 per barrel.
• Natural Gas: US October natural gas futures rose by over 5.08%, to $2.2540 per million British thermal units. US natural gas inventories last week increased less than market expectations.

Due to fears of an economic recession, oil prices not only fell to a new low in 2024, but are also on the verge of breaking the low point of 2023.

Although the intraday ISM Services PMI data had narrowed the rise in gold prices, due to the ADP data combined with a significant drop in July JOLTS job openings on Wednesday, implying a significant slowdown in the labor market, the weakening of the US dollar and US bond yields boosted precious metal prices, with gold prices rising to nearly a week high:

• Gold: COMEX December gold futures rose 0.84% at the close, to $2547.20 per ounce. Spot gold maintained its upward trend throughout the day, with US stocks rising over 1.1% above $2520 after the pre-market "small non-farm" and initial claims data were released. At the close, spot gold rose 0.86% to $2516.76 per ounce.
• Silver: COMEX December silver futures rose 2.14% at the close, to $29.168 per ounce. Spot silver maintained its upward trend all day, with US stocks rising nearly 3.2% above $29.10 in the morning, and spot silver rose 1.94% at the close to $28.8229 per ounce.
• Analysts pointed out that if the non-farm report released on Friday in August shows an unemployment rate reaching 4.3% in July, the highest level since 2021, with the market increasing bets on a significant rate cut, gold prices are expected to return to historical highs and may hit $2700 by the end of the year.
• London industrial metals showed mixed movements. The economic barometer "Dr. Copper" rose over 1.47% to $9092 per ton, LME copper rose $272, while LME zinc fell over 2.07%, LME aluminum fell $18, LME lead fell $25, and LME nickel fell $136.
• COMEX copper futures rose 1.50% to $4.1402 per pound.

Haven demand supports gold price hovering near historical highs

Updates before 23:00 on September 5th Beijing time

Labor market data is mixed. The US added the lowest number of new jobs in three and a half years in August, further confirming a slowdown in the labor market, with US bond yields and the dollar declining together. However, initial jobless claims for the week fell from the previous week and were lower than expected, while continued jobless claims fell to the lowest level in nearly three months, narrowing the decline in the US dollar. The market will focus on tomorrow night's non-farm data for further validation.

The US ISM non-manufacturing activity was moderately expanding for the second consecutive month, and the final Markit services PMI released earlier showed a similar trend, easing concerns about a hard landing.

Major US stock indices rose in early trading but mostly turned lower, with only the Nasdaq rising:

• Major US indices rose before falling back: The S&P 500 rose nearly 0.5% before falling over 0.3%. The Dow, closely related to the economic cycle, rose nearly 0.3% before falling over 240 points or nearly 0.6%. The Nasdaq, dominated by tech stocks, rose over 1.2% before giving back most of the gains.
• In early trading, major industry ETFs in the US showed mixed movements, with the global aviation industry ETF rising over 2%, the consumer discretionary ETF rising nearly 1%, and the healthcare ETF falling over 1%.

• "Technology Seven Sisters" all rise. Nvidia rose more than 3.2% before halving its gains, Tesla rose more than 7% at one point, with the company expecting to provide Full Self-Driving (FSD) in China and Europe in the first quarter of 2025, pending regulatory approval. Amazon rose more than 3.7% at one point, Apple rose more than 2% at one point, "metaverse" Meta rose more than 1.7% at one point, Google A rose more than 1.8% at one point, and Microsoft rose more than 1% at one point.

• Chip stocks fluctuate. The Philadelphia Semiconductor Index initially fell more than 1.5% before rising more than 1%; KLA fell more than 2.7% before halving its decline, ASML fell more than 2.4% before halving its decline, AMD fell more than 2% at the opening before erasing most of the losses, while Arm Holdings rose more than 2.8% at one point, TSMC's US stock rose more than 2.2% at one point, Intel rose more than 2.3% at one point, and Micron Technology rose more than 1.5% at one point.

• AI concept stocks fluctuate. C3.ai fell more than 18% at one point, Serve Robotics fell more than 8.5% at one point, SoundHound AI, an AI voice company held by Nvidia, fell more than 1.6% before rising more than 1.4%, now turning downward, AMD fell more than 3.9% at the opening before halving its decline, while Oracle rose more than 1.7% at one point.

• Chinese concept stocks rise more than fall. The Nasdaq Golden Dragon China Index rose nearly 1.3% at one point. Among popular Chinese concept stocks, Nio and ZEEKR rose more than 8.6% at one point, Li Auto once rose more than 1.4%, XPeng once rose more than 6%, Bilibili rose more than 4.3% before giving back some gains, while Pinduoduo fell more than 2.6% at the opening before halving its decline.

• It is worth noting that Nio's Q2 delivery volume and revenue both hit record highs, with Q2 revenue increasing by 99% year-on-year, and Q3 delivery guidance exceeding market expectations.

The following is the content updated before 21:50

Yesterday, the collapse of the "Fed's favorite employment indicator" led to a weakening in JOLTS job vacancies to the lowest level since early 2021, enhancing rate cut expectations and causing a plunge in U.S. bond yields, with global risk aversion on the rise.

On Thursday (September 5th), the U.S. August ADP employment figures were released, showing an increase of 99,000 people, far below the expected 145,000. U.S. bond yields continued to decline, with the 2-year Treasury yield falling by over 2 basis points, and safe-haven assets like gold rising.

U.S. stocks opened with mixed movements, with Nio rising more than 4% after its earnings, Tesla rising nearly 2% at the opening, and C3.ai falling by 18%.

The rise in U.S. bonds led to a weaker U.S. dollar, a stronger Japanese yen, and Australian and New Zealand bonds following the trend of U.S. bonds. Today, the Asia-Pacific stock markets opened higher but turned lower, with Japanese and South Korean markets collectively closing lower, while European stocks opened slightly lower Investors are closely watching the non-farm payroll data to be released on Friday. In addition, the US August ISM non-manufacturing index will be released at 22:00 tonight.

• US stock market opens with mixed performances: NIO rises more than 4% after earnings, Tesla rises nearly 2% at the beginning of the session, while C3.ai falls by 18%.
• US August ADP employment report released, US bond yields drop: 2-year Treasury yield down more than 2 basis points, 10-year Treasury yield down more than 1 basis point. The US dollar index briefly declines to an intraday low. USD/JPY falls by 0.5% to 143.01.
• Asian stock markets erase most gains after falling in Japan, with both Japanese and South Korean markets closing lower.
• European stock markets open mostly lower, with the STOXX 600 index showing little change.
• International oil prices rise, with both WTI and Brent crude up more than 1% intraday.
• Gold and silver prices rise. Spot gold touches $2520 per ounce, up 1% intraday. Spot silver rises over 2%, currently at $28.83 per ounce.

[Update at 21:35]

Mixed feelings about US employment data, market focuses on tomorrow's non-farm payroll data. US stocks open with mixed performances, with the Nasdaq falling by 0.11%, S&P 500 up by 0.04%, and Dow Jones up by 0.22% at the beginning of the session.

Tesla rises nearly 2% at the beginning of the session, with the company expecting to provide Full Self-Driving (FSD) in China and Europe by the first quarter of 2025, pending regulatory approval.

NIO rises over 4% at the beginning of the session, with Q2 revenue growing by 99% year-on-year and Q3 delivery guidance exceeding market expectations. C3.ai falls by over 18% at the beginning of the session, with the company's last quarter subscription revenue falling short of expectations, and the timing of profitability remains uncertain.

Gold stocks rise, with Newmont up by over 3%, Kinross Gold up by nearly 3%, and Barrick Gold up by over 2%.

[Update at 20:20]

US August ADP employment change ("small non-farm") data released: an increase of 99,000 jobs, below the expected 145,000 jobs, with the previous value at 122,000 jobs.

After the release of the US ADP data, US bond yields briefly drop, with the 2-year Treasury yield down more than 2 basis points at 3.735%; the 10-year Treasury yield down more than 1 basis point at 3.744%; and the US dollar index briefly declining by 0.23%.

The US dollar index briefly declines to an intraday low, down by 0.23%. USD/JPY falls by 0.5% to 143.01.

Spot gold touches $2520 per ounce, up 1% intraday. Spot silver rises over 2%, currently at $28.83 per ounce.

US stock index futures are all down, with Nasdaq 100 index futures widening losses to 0.68%, and S&P 500 index futures down by 0.28% 【17:40 Update】

NIO's pre-market stock price rose nearly 5%, with the company releasing its second-quarter 2024 financial report, achieving record high revenue and delivery volume.

In Q2 2024, the company's revenue reached 17.45 billion RMB, compared to 8.77 billion RMB in the same period last year. It is expected that the delivery volume in Q3 2024 will be between 61,000 and 63,000 vehicles, with the market expectation at 56,770 vehicles.

【17:10 Update】

Both WTI and Brent crude oil prices rose over 1% intraday, reaching $69.92 per barrel and $73.44 per barrel, respectively.

Tesla's pre-market stock price rose over 2.5%, with the company expecting to provide Full Self-Driving (FSD) in China and Europe in the first quarter of 2025, pending regulatory approval.

【16:20 Update】

Pre-market futures of the three major U.S. stock indexes saw a slight increase.

Among major tech stocks, Tesla rose over 2%, while NVIDIA and TSMC both rose over 1%.

【15:00 Update】

Major European stock indices opened slightly lower, with the Euro Stoxx 50 index down 0.11%, Germany's DAX index down 0.29%, and France's CAC 40 index down 0.50%. The UK's FTSE 100 index initially fell by 0.2% before rising by 0.02%.

Japanese and South Korean stock markets closed collectively lower, with the Nikkei 225 index down 1.05% at 36,657.09 points; the TOPIX index down 0.48% at 2,620.76 points. The KOSPI index in South Korea closed down by 0.2%.

【8:30 Update】

The Japanese Yen rose against the US Dollar, briefly reaching 143 before currently standing at 143.52.

As of now, the yields on the 10-year and 2-year US Treasury bonds have both dropped by 1 basis point.

The trend of US Treasury bonds is partly influenced by the Job Openings and Labor Turnover Survey (JOLTS). On Wednesday, the US Bureau of Labor Statistics released a report showing that the number of job openings in July was lower than market expectations, dropping to the lowest level since the beginning of 2021. Layoffs increased, consistent with other signs of a slowdown in labor market demand.

Chris LaRocco of Morgan Stanley stated:

"The market may not be as tense as it was a month ago, but they are still looking for confirmation that the economy will not cool excessively. However, they have not found it yet."

The Federal Reserve will begin cutting interest rates in a few weeks, with the main question currently being the magnitude of the initial rate cut. The US employment data to be released on Friday will help determine the answer.

Concerns about growth were raised by last month's employment report, and Federal Reserve Chairman Jerome Powell has explicitly stated that the Fed is now more concerned about risks in the labor market than inflation.

In addition, the Asia-Pacific markets opened mixed. The Nikkei 225 index opened 1.4% lower, the TOPIX index fell by 1.2%, and the KOSPI in Seoul opened 0.7% higher