This report is from today's CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Half a million jobs
U.S. private sector companies added 497,000 jobs in June, according to payroll processing firm ADP. That's more than two times the Dow Jones estimate of 267,000, and well above May's downwardly revised figure of 267,000 jobs. The ADP jobs report doesn't necessarily give a good estimate of the Department of Labor's jobs report. But it shows how strong the U.S. jobs market remains.
Worst days and lowest levels
U.S. stocks fell Thursday as traders grew concerned over what the scorching hot ADP jobs report means for interest rates. The yield on 2-year Treasury rose around 4 basis points to hit 4.987%, while the 10-year jumped 9 basis points to 4.031%. Europe's Stoxx 600 index sank 2.34% to its lowest level in three months.
Yellen in China
U.S. Treasury Secretary Janet Yellen started her four-day trip in Beijing Thursday. Yellen will discuss with China "how to responsibly manage [the U.S.-China] relationship, communicate directly about areas of concern, and work together to address global challenges," the Treasury Department said Sunday.
BlackRock bullish on Bitcoin
Bitcoin briefly touched $31,450 yesterday, its highest level since June 2022, but has since dropped to $30,175. Still, investors are excited (again) after BlackRock CEO Larry Fink called the cryptocurrency "an international asset … that people can play as an alternative." BlackRock, the world's largest asset manager, last month filed to launch a spot bitcoin exchange-traded fund.
[PRO] Investors are 'too complacent'
Markets may have rallied in the first half this year, but investors shouldn't take it as a sign that the second half will be as kind to stocks. Deutsche Bank's Maximilian Uleer, head of European equity and cross-asset strategy, says that investors have become "too complacent" — and suggests two ways investors can protect themselves from a potential downturn.
The bottom line
The expectation-shattering ADP jobs report was all traders could think about yesterday.
Threads, Meta's new Twitter rival, snagging 30 million signups in one day? Investors loved that. They pushed shares up about 2% in premarket trading.
BlackRock CEO Larry Fink calling bitcoin "an international asset"? Cryptocurrency watchers almost swooned. Prices of bitcoin touched a 13-month high.
Then the jobs data was released and sucked all the air out of the room. It reaffirmed that the U.S. economy isn't cowed by current interest rates, meaning that higher rates in the upcoming months are all but certain.
Traders now think there's a 27.5% chance the Federal Reserve will raise benchmark rates to 5.5% to 5.75% in September, according to CME FedWatch Tool. On Wednesday, the odds for that were only 18.1%, noted CNBC's Scott Schnipper.
Meta ended the day down 0.81%. Bitcoin fell 4% from that height.
Major U.S. indexes fared equally badly. The S&P 500 declined 0.79%, the Dow Jones Industrial Average sank 1.07% and the Nasdaq Composite slid 0.82%. Those were the worst daily movements for the S&P and Dow since May. All indexes are on track to post weekly losses, too.
Another piece of jobs data released yesterday, however, may soothe some worries. The Job Openings and Labor Turnover Survey showed that job listings in May fell to 9.82 million, 496,000 fewer than April. It was also below the estimate of 9.9 million consensus estimate.
Put together with the ADP jobs report, we see a (very blurry) picture of lower demand for workers from companies, and more people in jobs — in other words, the U.S. labor market inching towards equilibrium.
The Labor Department's nonfarm payrolls report for June, out tomorrow, will give us a clearer view. Economists expect a 240,000 rise in payrolls and an unemployment rate of 3.6%. But we all know how expectations tend to turn out when it comes to the U.S. jobs market.
