Levi Strauss lost value on the New York stock exchanges on Friday. Investors were shocked by the news that the manufacturer and marketer of jeans, jackets, sweaters and cardigans has lowered its full-year profit forecast.
The jeans brand is mainly struggling with disappointing sales in its American home market, the company’s largest market. In Asia, Levi’s did see sales increase. The stock was down 8 percent.
Attention was also mainly focused on the official jobs report of the US government. It showed that the world’s largest economy added 209,000 jobs last month. That was less than a month earlier and also less than expected. On Thursday, payslip processor ADP reported that many more jobs were added in the US private sector in June.
As a strong labour market gives the Federal Reserve more room to raise interest rates, investors fear that borrowing costs in the United States will continue to rise. The Fed has already signalled that it will almost certainly raise interest rates later this month, following a brief rate hiatus in June. Higher interest rates are generally unfavourable for equity investments.
The focus also remained on China. US Treasury Secretary Janet Yellen is in Beijing to strengthen ties between the two superpowers. Yellen expressed her concern, among other things, about the export restrictions China recently announced for two raw materials that are of great importance to the chip industry.
Shortly after the start of trading, the Dow Jones index was 0.1 percent lower at 33,887 points. The broad S&P 500 remained virtually the same at 4410 points, and tech exchange Nasdaq rose 0.1 percent to 13,694 points.
Tesla rose 1.3 percent. The automaker said it would offer new buyers of its best-selling models in China a cash bonus of nearly $500 if they have a referral from an existing Tesla owner. On Thursday, the share fell more than 2 percent after Tesla and major Chinese car manufacturers promised to compete fairly with each other to prevent “abnormal prices”. This should end the price war that has been going on for months.