The Buzz on Business for June 7th 2024

The labor market data that was released on Thursday before the opening bell was weak. We’ll go over all the numbers in just a minute, but we remain fascinated by the shift in the narrative we’ve seen in the last week or so.

On Friday, May 3^rd, just one month ago, the jobs report rolled out and it was uniformly bad news. Average Hourly Earnings, Job Creation, and the Labor Force Participation Rate all missed expectations and did so by a wide margin.

The unemployment rate, the headline statistic from the report, likewise missed expectations and ticked up from a 3.8% to a 3.9% rate. No doubt. Bad news.

And stocks gapped up at the open. The Dow was up over 450 points on the day, and over the next two weeks, it soared over 1200 points and closed for the first time above 40,000. A remarkable run in the shadow of some pretty bad news.

Of course, this is explained by the market’s obsession with the Fed and with interest rates.

Well, the case for rate cuts got a lot stronger at 8:30 AM ET yesterday, yet stocks sold off. Admittedly, they sold off from new all-time highs, still, back in the, you know, good old days, back when bad news was good news, we would have expected a follow through day on big volume.

And that is definitely not what we got.

Stock Market Report

Stocks finished mixed on Thursday but mostly lower as decliners edged out advancing stocks on sharply lower volume in advance of May’s jobs report due out this morning.

• The Dow Jones Industrial managed a small gain. It was up 79 points or two-tenths of one percent and closed at 38,886.
• The S&P 500 was down a minuscule one point, basically flat, and closed at 5,353.
• The NASDAQ Composite likewise had a small loss. It was down one-tenth of one percent. That’s 15 points and it closed at 17,173 .
• Not so much the Russell 2000. The small caps were down seven-tenths, that’s  fourteen Russell 2000 points and they start the day today at 2,049.

Bond Market Report

We get our bond market data from two reliable sources. Mostly they agree, Thursday they disagreed but not by much. Rates were down again on Thursday but not by much.

• The 2-year treasury closed with a yield of 4.726%, that’s off less than one basis point.
• The 20-year closed basically flat at 4.515%.

Oil, Gold, and Bitcoin

• Oil was up again yesterday. It closed at $75.50 for a gain of $1.26.
• Gold was up $17.50, and a troy ounce will now set you back $2,391.60
• And Bitcoin gave back some of its recent gains. It closed at $70,491.84, off $642.15.

Labor Market Week Continues: Mixed

Initial and Continuing Jobless Claims both came in above expectations on Thursday, evidencing continuing weakness in the labor market.

The Atlanta Fed’s GDP Now stat came in well above expectations. GDP Now is a snap Gross Domestic Product calculation, this time for the just ended second quarter. It tends to be volatile but hey good news is better than bad news, am I right?!!

Yesterday we forgot to mention that both the S&P Global and the ISM Purchasing Managers Index came in well above heightened expectations, so a bit of good news out of the services sector of the economy.

And today is the culmination of labor market week here at the Ministry of Truth. The jobs report rolls out at 8:30 AM ET. Average Hourly Earnings, Labor Force Participation Rate, the Nonfarm Payrolls, job creation report and the Unemployment Rate for the month of May all are likely to move the markets.

Everyone here at World Headquarters is on mandatory weekend overtime so we can slice and dice all the data and report it all to you bright and early Monday morning, here on the Buzz!