The labor department releases Mai’s report, and Musk fears the possibility of a market crash.
Wall Street and the stock market had a minor fall on Friday after the jobs report was released by the U.S. labor department. According to the report, the U.S. labor department added 390.000 new jobs in May. The number was welcomed positively by many parties, and Biden noted that its administration efforts are on the right track.
The U.S. administration is making great efforts to fight the hardest increases in food and energy prices over the past 40 years. Its plan is to increase the central bank’s interest rates on a series of interest hikes, the fastest service over the past 30 years.
One reason for the positive jobs reports numbers is that a large number of workers are quitting their jobs in the pursuit of a better position or better income. which is considered the highest number over the past 6 months.
Despite concerns about the impact of interest rate hikes on the labor market, Mai’s jobs reports suggest the opposite. Keeping up with the labor department jobs reports, retail added 61.000 positions, and construction activities added 36.000 positions. Generally speaking, the majority of industries added new positions, including warehousing companies, adding 47.000 positions, and restaurants and leisure added 84.000. The U.S. Nasdaq composite fell by 1% after releasing the job reports and after a controversial email that was sent by Elon Musk.
The Tesla CEO has sent an email which was reviewed by Reuters experts, including that Tesla will cut 10% of its workforce.
For his reasons, Musk believes that the economy is far away from being good or healthy and that in the next few weeks or months it will crash. Hours after the email went public, the Tesla index moved negatively, grading the US NASDAQ down by 1%. Musk’s position on the U.S economy is based on the regional banks’ performance in the first quarter and the analysis forecasts. According to JPMorgan, there is a hurricane, and the U.S economy will face a recession any time soon.
Food and energy prices remain high, and that puts a massive burden on the average American consumer. Over the past three months, oil and gas prices have skyrocketed as a result of the Russian military operation against Ukraine. Today, the U.S and its allies agreed to implement a new sanction against Russia. As of today, the European Union’s strategy will target Russian oil, banks, and military officials. This decision came one day after the OPC members agreed to increase their daily production to cover the market demand. The EU will cut imports of Russian oil into European countries, de-switching key banks and curtailing a massive source of revenue for Russia.
However, from an economic perspective, targeting Russian oil might end up as a negative option for the market in the long term. Arguably, Russian oil represents a large proportion of the energy market in the EU, and, by targeting it, prices will rise instantly in the next few weeks.