S&P 500, Nasdaq end at fresh records after solid US jobs data
The broad-based S&P 500 jumped 0.8 percent to 6,279.35, a second straight record.
The tech-rich Nasdaq Composite Index gained 1.0 percent to 20,601.10, also a record, while the Dow Jones Industrial Average climbed 0.8 percent to 44,828.53.
The US economy added 147,000 jobs in June while unemployment dipped to 4.1 percent from 4.2 percent, a sign of US labour market resilience despite the White House's wave of tariffs.
"We have a nice rally going, and the reason for that is that the employment data was stronger than expected," said Peter Cardillo of Spartan Capital Securities, who noted that the market overlooked that the job additions included a heavy share of public sector posts.
Markets also shrugged off data showing an uptick in the US trade deficit in May, with both imports and exports declining.
But congressional Republicans expressed confidence they would win final passage of Trump's sweeping fiscal package, which includes heavy spending increases for deportations and cuts in federal health care programs.
Investors have greeted the extension of tax cuts, but have expressed concern at forecasts that the package will add $3.4 trillion in debt.
US stock exchanges closed early Thursday and will be shuttered Friday for the July 4th Independence Day holiday.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Eyewitness News
3 hours ago
- Eyewitness News
G20: Fiscal and monetary policy heads to host latest finance track meetings in KZN
JOHANNESBURG - It will be a big week for South Africa's G20 presidency when fiscal and monetary policy heads host the latest finance track meetings in KwaZulu-Natal. The meetings will kick off on Monday, starting with the deputy finance ministers and deputy central bank governors. This is the fourth time the group will meet with global counterparts since South Africa assumed the rotational presidency. At previous meetings, finance officials from South Africa and other parts of the world emphasised challenges and constraints to growth in developing countries, particularly in Africa. Debt sustainability for developing economies is one of the priorities, with calls from the continent for solutions to address the crippling debt crisis, which is possibly the worst in 80 years. The high cost of cross-border payments is also expected to be back on the agenda at this week's meeting. 'It has to do with cost, it has to do with speed, it has to do with transparency. It's a very important area of work, particularly when the presidency of the G20 is held by an African country like South Africa, because the cost of cross-border payments in African corridors is among the highest in the world. It is said that the most expensive corridor is the Johannesburg-Harare corridor,' said Reserve Bank governor and co-host of the G20 finance track Lesetja Kganyago. The series of meetings in Durban comes on the back of continued geopolitical tensions and looming threats of new trade wars. South Africa is the only country in sub-Saharan Africa to be singled out in the latest round of announcements by United States (US) President Donald Trump, with the possibility of a 30% tax on exports to the US from August.
The South African
4 hours ago
- The South African
Warren Hammond's Personal View: Fragile highs
On 17 March 2025, The Personal View published: 'Positioning for the Market Turmoil Ahead, 2025-2028.' That article opened with this warning: 'The March-June 2025 period will bring extreme market volatility, driven by geopolitical conflicts, economic instability, and shifting power dynamics. Immediate shocks are severe, while long-term consequences shape financial markets, trade flows, and capital allocation into 2028.' That foresight was swiftly validated. By April, global markets were reeling: the VIX surged, geopolitics flared, and equities sold off aggressively as investor confidence faltered. A rearmament cycle is driving global defence spending higher Middle East instability, energy insecurity, and oil supply disruption; warning of Iran-Israel and Ukraine-Russia conflict The rise of cyberattacks and surveillance infrastructure as dominant investment themes A reiteration to accumulate gold, first recommended on 8 March 2021 Now, markets are near record highs, but complacency is visible, momentum is fading, and liquidity is thinning. July is fragile. The next wave of volatility is nearing. Headline-driven shocks from geopolitical, regulatory, or domestic unrest Potential for flash crashes or algorithmic dislocations Cyberattacks or infrastructure disruptions that unsettle sentiment A breakdown in leadership or sentiment sparking fear-based trading Overstretched valuations lacking support It's time to rebuild protection, reduce fragility, and prepare for downside risk. Downside Protection: Portfolio Insurance on the S&P 500 For global investors with equity exposure, especially those fully allocated, now is the time to consider derivative trades to hedge a sharp S&P 500 drawdown. Put Spread Collar Buy a near-the-money put, sell a deeper one, and finance with an OTM call. A low-cost way to insure downside while capping upside. Zero-Cost Put Spread Buy a 3-5% OTM put and sell a 7-10% OTM put for limited-cost protection against moderate declines. VIX Call Options Purchasing near-term VIX calls (2-4 weeks out) helps hedge tail risk, as volatility typically spikes during equity stress. SPX Ratio Put Spread Buy one ATM put and sell two or more deeper OTM puts. Lower cost, but introduces risk below a second threshold, is useful in deep sell-offs. These can be tailored to other global indices (Euro Stoxx 50, FTSE 100, Nikkei, JSE Top 40, etc.) correlated with U.S. equity direction. Conclusion: The market may look strong on the surface, but it's skating on thin ice. July is tactically vulnerable. Volatility returns when least expected. Now is the time to position defensively, protect gains, and prepare for a sharp risk repricing. Have you started adjusting your investment strategy in anticipation of renewed volatility? Share your thoughts, questions, or alternative strategies in the comments below. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
Daily Maverick
14 hours ago
- Daily Maverick
Trump tariffs threaten thousands of Eastern Cape manufacturing jobs — but mitigating action can be taken
The announcement by US President Donald Trump that South African goods will be subject to 30% import tariffs from 1 August is the latest addition to the clamour of alarm bells about the viability of manufacturing in the Eastern Cape, potentially putting thousands of jobs on the line. The reality is that a number of countries will now have significant cost advantages over South Africa, including countries on this continent, while other countries have the flexibility to absorb the tariffs. In addition, this will strengthen countries with lower tariffs that we did not compete with in the past. And if imports from South Africa are replaced with products made by new US manufacturers, there will be an oversupply of these products in the global marketplace. Analysis by the Nelson Mandela Bay (NMB) Business Chamber indicates that thousands of direct and indirect jobs in manufacturing in the Eastern Cape are at risk from the impacts of the new US tariffs. This is in terms of reduced competitiveness and economies of scale of SA manufacturing against more favourable locations worldwide, as well as the knock-on effects on other trading relationships and the responses of other countries in an escalating global tariff war. Such job losses will have a vast socioeconomic impact, given that each employed breadwinner supports an estimated 10 other people in extended families and communities. Alarm bells over the loss of manufacturing capacity and employment in NMB have been ringing for some time, as evidenced by the downsizing of operations and outright plant closures. This has been particularly evident in the tyre industry, where over the past few years we have seen Bridgestone and ContiTech closing factories, while Goodyear is restructuring its operations, which may result in the closure of its plant in Kariega. Over recent years, we have also seen the restructuring and, in some instances, the closures of catalytic converter and seat manufacturing companies. Automotive sector faces crisis On the vehicle manufacturing side, General Motors left South Africa at the end of 2016, resulting in the Chevrolet brand leaving the market and job losses at the company, suppliers and dealers. Alongside this, vital community support initiatives in the education and housing areas disappeared. Mercedes-Benz, which exports vehicles to the US, has suspended production at its operations for six weeks until the end of this month. This follows a restructuring last year that saw the plant shed 700 jobs. The NMB Business Chamber's Enabling Environment Barometer indicates that more direct and indirect jobs are at risk, while several manufacturers have imposed hiring freezes. Deindustrialisation is not in itself the issue. The shift from heavy industry and manufacturing to the services sector and high-tech, innovation-oriented businesses is a natural progression in advanced, maturing economies, especially where services are exported, which is not necessarily the case in South Africa. The country is in line with global trends in developed economies of a declining contribution of manufacturing to GDP and employment. However, in our developing economy with rising unacceptably high levels of unemployment (the Eastern Cape has the second-highest unemployment rate in SA, which recently rose by 2.7 percentage points to 39.3%), this is not a sign of positive economic progress; it is a trend that urgently needs to be reversed. Deindustrialisation in South Africa stems from a weakening economy characterised by increasing costs of production and doing business, inefficiencies in logistics and infrastructure, and a lack of basic service delivery. The enabling policy environment is also lagging in incentives to support local manufacturing in general, and particularly the shift to new energy vehicle technologies and e-mobility solutions, all of which are exacerbated by the US tariffs and their knock-on effects. Multinationals can move production between facilities around the globe, which gives them the most competitive base from which to operate. This becomes a barometer — the greater the number of multinationals closing or downsizing, the bigger the systemic problems in a region. Why Nelson Mandela Bay and the Eastern Cape can't afford to fail The economy of Nelson Mandela Bay and the Eastern Cape is in a vulnerable position, as the region remains centred on manufacturing, with the automotive sector the foundation of deep value chains and a surrounding ecosystem of component manufacturing, logistics providers and suppliers of indirect goods and services. The strength of the automotive sector and its investment in innovation and technology, and the skills associated with it, bring immense value to the area. Alongside this, manufacturing in other sectors, such as beverages, pharmaceuticals and agro-processing, has emerged in NMB. Given the economic knock-on impact of manufacturing, the sector's contribution to the Nelson Mandela Bay economy is probably far greater than its direct contribution of 25%. Similarly, the approximately 64,000 jobs in the metro directly linked to the automotive sector, representing more than 40% of auto manufacturing employment in South Africa, have an estimated multiplier effect of four additional jobs in direct supply chains and sectors such as retail, tourism and property. The SA automotive industry is highly export-oriented, with almost two-thirds of local vehicle production destined for export markets and more than 50% of that emanating from Eastern Cape manufacturers. South African manufacturers need to retain these levels of exports to maintain the economies of scale that enable competitiveness, which in turn supports local vehicle manufacturing and employment. However, manufacturers that do completely knocked down (CKD) vehicle manufacturing, where the entire vehicle is assembled from imported or locally made parts, are losing ground to the rapid rise of cheap fully assembled vehicles and the semi-knocked-down (SKD) assembly of vehicles that are imported partly assembled. Sales of locally built vehicles have declined from 46% of domestic vehicle sales in 2018 to 37% last year, and five of the 10 top-selling passenger cars in the local market are now from brands that do not do CKD assembly in South Africa. Due to its deep value chains and interconnectedness with component manufacturers, and the surrounding network of local suppliers of goods and services, as well as the ripple effect into other sectors, CKD manufacturing supports far greater levels of investment, employment and localisation of manufacturing than does SKD assembly. Policy reform While addressing the issues of ineffective service delivery, crumbling infrastructure, logistics bottlenecks and safety and security are critical to ensuring an enabling environment for business, the other key to reversing deindustrialisation lies in reforming the policy landscape. Attempting to protect local manufacturing through retaliatory tariffs is not the solution, as this is likely to result in further rounds of counter-tariffs and impacts on South Africa's trade relationships with the US and other countries — an unproductive approach with few likely positive outcomes. Rather than using tariffs to eliminate external competition, South Africa needs to be looking at how to support and strengthen local manufacturing through incentives that encourage investment in CKD over SKD manufacturing, localisation of components, and give local operations a competitive advantage over other locations within a multinational brand. Moreover, we need to reduce complexity and make it as easy as possible to retain and attract investment to our country. Incentives should be structured to attract and encourage new investment without imposing massive bureaucratic challenges. Alongside efforts to improve SA's trade offer to the US, we need to explore and strengthen other trading partnerships, particularly with BRICS countries, the European Union and Southeast Asia, to diversify our markets. We should be driving towards finalising the rules of origin for vehicles to activate the potential under the African Continental Free Trade Area agreement. Exports to BRICS markets currently generally comprise unbeneficiated raw materials and agricultural products. SA's exports to the European Union and the US represent greater diversity and integration, and more opportunities for job creation that are backed and supported by trade agreements. SA needs to be a source of high-margin value-added products and beneficiated minerals, not a source of low-margin minerals. We must do everything possible to retain and strengthen our manufacturing capabilities so that we can create and unlock downstream employment opportunities. Manufacturing is the bedrock of the Nelson Mandela Bay and Eastern Cape economy. The economic future of this region depends on strategic action to ensure that we offer a competitive value proposition for manufacturing, in terms of the basic enabling environment and forward-thinking policy. Our business community wants this to happen and is not simply whining about the issues; rather, we will continue to roll up our sleeves to take action and be part of the solution to retain investment and employment in NMB. The chamber remains positive that we can realise the potential of the Bay of Opportunity as a diversified manufacturing and export hub for Africa, if we start now. This requires a multi-stakeholder response centred on speed and taking action. DM
