Jobs Growth Comes in Lukewarm | Daily Market Update

Friday, June 4, 2021

Top Story

Jobs Growth Comes in Lukewarm

  • The U.S. economy gained 559,000 jobs in May according to the US Bureau of Labor Statistics, falling short of Bloomberg survey estimates for a 675,000 gain.
  • The unemployment rate fell 0.3% to 5.8%, though that was paired with a surprise drop in the labor force participation rate to 61.6%.
  • While this report did little to satisfy labor market bulls or bears, it likely also did little to entice the Federal Reserve to move up its tapering timetable, and that will likely be the market focus today.
  • We will take a closer look at the state of the US labor market in today’s LPL Research blog, available at 12p.m. ET.

Daily Insights

U.S. markets open higher after good—not great—monthly jobs report

  • The S&P 500 Index is reversing Thursday’s losses and trading about 0.4% higher.
  • European equities are little changed through midday trading.
  • Asian markets finished mostly lower with Japan (Nikkei) off by 0.4%.

Close but no cigar

The S&P 500 Index has now traded within 2% of the all-time high, without making a new high, for 10 consecutive days.

  • This is the longest such streak since 11 in a row in late 2019.
  • The all-time record is 23 in 1964.
  • The S&P 500 has also gone seven days in a row without a close of more than 0.5% away from the previous day’s close.
  • This has been a historically calm market over the past few weeks, so our advice is to get ready for some potential volatility, as the pendulum will eventually swing.

Technical update

The S&P 500 fell just 0.4% Thursday, but it marked the worst loss since May 18. Any further downward movement sets the index up for a test of its 50-day moving average at 4132.

Proceed With Caution in the Bond Market

LPL Research makes a case for higher long-term interest rates but argues that high-quality bonds can still play a pivotal role in mitigating equity risk. Learn more in this week’s Weekly Market Commentary.

Do You Have Your Mind Right?

On LPL Street View video, LPL Financial Director of Research Marc Zabicki lists three practical steps for mitigating the potential havoc irrational influences can have on investment decisions.



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