Hey everyone, for the US this was a holiday shortened week as we come off Memorial Day Weekend. Get my take on the current markets below;
Weekly Sound Bites;
Major indexes closed moderately higher in a shortened trading week, with markets closed Monday in observance of Memorial Day…Trading volumes were generally light, as is typical of the start of the summer holiday season…the chief concern in market price action at this time isn’t the strong earnings growth; but that an overheating economy will force the FEDs to rein in its bond-buying programs and begin the process of lifting interest rates…Over the past few months we’ve seen av3rage hourly earnings rise over 7% annualized and typically labor costs tend to be more sticky than transitory supply chain issues…and with over 495 of the S&P 500 companies reporting earnings growth of +50% during Q1 we also see that Q2 will be even stronger…to give you the nature of the size of the US Debt, just a 3% increase in bond yields would mean the total US spend on Debit service would be larger than the entire Defense sector…
The strength of the economic recovery remained in the spotlight, with Friday bringing the closely watched monthly nonfarm payrolls report…The Labor Department reported that employers added 559,000 jobs in May, somewhat below consensus forecasts of around 650,000, while the labor force participation rate ticked down to 61.6% from 61.7% and the unemployment rate fell more than expected, from 6.1% to 5.8%…on a less than stellar economic news is good for market price action news (Bad News is Good News) stocks rose and longer-term bond yields decreased on the news, suggesting that most investors expected it would give the Federal Reserve additional time to keep monetary policy highly accommodative…
The yield on the benchmark 10-year U.S. Treasury note fell back on Friday following the May payrolls report… The corporate bond markets were relatively quiet. Investment-grade corporate bonds experienced relatively light trading volumes, and new issuance was in line with expectations…
Shares in Europe rose amid optimism about the prospect of an economic recovery. However, worries that central banks might begin withdrawing stimulus sooner than expected because of inflationary pressures curbed equities’ advance… Eurozone inflation increased 40 basis points sequentially to 2% in May—above the ECB’s stated target of below but close to 2%…The European Union is planning to lift all quarantine rules for those who have been vaccinated, starting July 1, and to introduce digital passports for travelers…
Chinese stocks retreated after recording three weeks of gains…On the China economic front, the private Caixin manufacturing PMI rose to 52.0, its highest reading this year as demand picked up…In contrast, the official manufacturing PMI fell slightly to 51.0…
Enjoy this Week’s Market Round-Up;
Don’t Be A Rat Brain Trader – Be the Red Stripe Zebra !!
Trade Smart !
hpb
