Jobs Growth Beats Estimates | Daily Market Update

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Friday, July 2, 2021

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Jobs Growth Beats Estimates.

  • The US economy gained 850,000 jobs in June according to the US Bureau of Labor Statistics, beating Bloomberg survey estimates for a 720,000 gain.
  • The unemployment rate increased 0.1% to 5.9%, against the backdrop of an unchanged labor force participation rate of 61.6%
  • While the headline number is fairly strong, the unemployment rate and participation rate numbers come as disappointments. The early equity market reaction indicates that investors are viewing this report as net-bullish, since it is likely not hot enough to push forward the Fed’s tapering/rate hike timeline.
  • We will take a closer look at the state of the US labor market in today’s LPL Research blog available at noon.

Daily Insights

US markets point toward a higher open as stocks have now gained six straight days.

  • The Nasdaq Composite opened higher as growth names continue to recent show leadership.
  • European markets are mostly higher through midday trading amid increasing concerns about the COVID-19 delta variant.
  • Asian markets were mostly mixed with the exception of Chinese markets which closed sharply lower as the PBOC (China’s central bank) scaled back cash injections into its financial system.

Happy Independence Day! Wishing everyone a fun and safe July 4th holiday weekend – careful with those fireworks!

Technical update.

  • Small caps led a very broad-based rally yesterday.
  • The Russell 2000 sits just 1.2% below its mid-March highs and could be nearing a major breakout.
  • The ratio of the Russell 2000 to S&P 500 Index is still above a rising 200-day moving average, suggesting a still positive trend for small caps despite underperforming since March.

LPL Research in the Media

LPL Financial Chief Market Strategist joined CNBC Squawk Box with Becky Quick yesterday for a nice discussion on current trends and the second half. You can watch the full interview here.

 Three Things That Worry Us

 We explore three things that worry us that could make the market more susceptible to a pullback as we enter the second half of 2021.  Learn more in this week’s Weekly Market Commentary.

 The Krispy Kreme Indicator

In this week’s LPL Market Signals podcast, LPL Research discusses why stocks are choppy in typical year two fashion, with many worries are creeping in and the upcoming Krispy Kreme IPO near the top of the list.

 

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