U.S. private payroll reports frighten Wall Street and the stock market amid fears of a global oil supply shortage.
The ADP national employment report deepened investors’ worries about a market recession. The agency released the private payrolls report on Wednesday morning, but the figures were lower than market expectations.
In a time when oil is failing and the global supply is under pressure, the private payrolls in the U.S. weakened in February, which left investors with pessimistic market expectations. Plus, the job openings for February also came in weaker than market forecasts, with an actual of 9.931 million jobs, compared to market forecasts of 10.400 million.
Based on the released report, U.S. private payrolls roughly added 145,000 in the last month, which is 55.000 short of market expectations.
Inflation has been low for the past eight months, which has encouraged the Federal Reserve. Yet, with oil failing and the OPEC sudden supply cut, investors hope that the FED officials will pause raising key interest rates by the next meeting.
Russia’s prime minister, Alexander Navac, said last Sunday that the U.S. failure with the banking crisis is what forced Russia and the OPEC members to cut oil production.
In the U.S., crude oil inventories declined by more than 3.7 million barrels, and oil prices fell shortly afterward, despite what the analysis says.
For OPEC, there were few oil output cuts in the past six months, with a tidal flow of 3.6 million barrels daily.
Between oil cuts, inflation rates, and the banking crisis, investors feel that it’s time for a hiking pause in May. According to Fed Tracker’s recent data, 60% of participant traders bet for a hike pause by the next meeting, which is scheduled for May. While the remaining 40% bet on a quarter-point interest hike.
The Silicon Valley bank failure is the second-largest banking crisis in U.S. history. The turmoil that followed was justified by all means. Wall Street has been mixed since the failure. That has caused more market turmoil in terms of corporate earnings.
Moving to the stock market, the S&P 500 benchmark fell by 0.45%, the Dow Jones futures were up by 0.13%, and the Nasdaq composite fell by 1.38%.
As for the manufacturing activity, the ISM non-factory activities posted lower-than-expected data with a current 51.2 compared to market forecasts of 54.5.
Meanwhile, the US dollar index is a little stronger with an increase of 0.28 percent to a trading market level of 101.55.
The 10-year Treasury yields index fell by 1,11% to 3,287, while the fixed 30-year bonds were down by 1,02% to 3,557.
Speaking about the market turmoil, gold trading prices are currently above the $2000 per ounce level. Gold gained 0.02% and rose to $2038.55 per ounce. With market expectations for more increases in the future.
In terms of the future outlook, market uncertainty jumps higher amid fears of more complex issues in the financial system. The labor market might slow down in the next few months due to FED moves and tightening policy.