Daily Data Flow: Stocks Fall; Job Growth Sluggish; China’s Strength May Lead to Weakness; Fed States Economy Expands Moderately

Stocks Fall on Stimulus Bets Amid Jobs, Factory Data (Bloomberg)

Stocks fell, sending the S&P 500 to a one-month low, as jobs and factory data missed estimates and investors speculated whether the Federal Reserve will begin to taper its stimulus soon. According to Bill Schultz, chief investment officer at McQueen Ball & Associates in Bethlehem, Pennsylvania, today’s economic data “may throw some cold water on this economic growth story continuing.” He continued, “So you got this contrast in what the Fed should do. All those cross-currents throw on some caution on the whole market. Investors are taking a pause and a more look-and-see approach than they have in the past, where equities are the only place to be.”

Job Growth Sluggish in Second Quarter (Reuters)

The economy is losing momentum, as data released today suggests that hiring by firms was sluggish this month. “The number was weak,” said Mark Zandi, chief economist at Moody’s Analytics. “The ADP (data) is suggesting instead of job growth stepping up, it’s actually stepping down as we move into the summer months,” Zandi continued. “It’s not like we’re falling off a cliff, it just feels like we’re throttling back a little bit.

China’s Strength Could Lead to Weakness (CNBC)

China’s expanding economy has been threatening trading partners from Europe, Asia and the United States, a situation which, alongside domestic tensions, is making China reconsider its economic model. “China’s economic policymakers are facing a crunch moment in the next few years because the economic model that has served them well for the past decade is no longer working,” said Mark Williams, chief Asia economist at Capital Economics.

Fed’s Beige Book Shows “Modest to Moderate” Growth (Bloomberg)

The central bank stated today that the economy expanded at a “modest to moderate” pace in 11 of 12 Federal Reserve districts, with gains ranging from business services to construction and manufacturing. “Hiring increased at a measured pace in several districts, with some contacts noting difficulty finding qualified workers,” the Fed said in its Beige Book business survey, which is based on reports from its regional banks.