Wall Street closed the week on a positive note after the US labour market delivered a better-than-expected jobs report on Friday. The headline payroll print of 139,000 comfortably beat forecasts, although the two prior months were revised down by a total of 95,000.
Despite this, wage growth was solid, and overall the update was seen as offering reassurance after a week of mixed economic data, with notable weakness in the ISM Manufacturing and Services data.
The Dow, S&P 500 and NASDAQ ended Friday’s session with gains of around 1%, while the mid-cap, domestically-focused Russell 2000 led the pack, closing up 1.7%. For the week, the Dow, S&P, NASDAQ and Russell gained 1.2%, 1.5% 2.2% and 3.1% respectively.
So, it was a decent start to June, even if most of the gains came in the last session of the week.
Also of note, the S&P 500 closed above 6,000 for the first time since February. US stock index futures were little changed in early trade on Monday. Having sat on their hands ahead of Friday’s Non-Farm Payrolls, investors were repeating the process as they await updates from today’s US-China trade talks in London.
Source: TN Trader
This aside, there’s little of interest on today’s economic calendar. But later this week there are key inflation prints, CPI and PPI, which come ahead of next week’s FOMC meeting. Also of note, the original meme stock, GameStop, announces earnings on Tuesday.
This could be of interest, particularly as the company is looking to copy MicroStrategy in leveraging its balance sheet to by Bitcoin. The CBOE Volatility Index was up 1% in early trade this morning.
Despite recent geopolitical and macroeconomic headlines, implied volatility has stayed relatively subdued. But whereas the VIX seemed quite relaxed around the mid-teens in February, it is currently holding in the high teens.
This represents a small, but significant, increase in investor caution, which is understandable given the ongoing uncertainty around global trade.
Once again, investors are climbing the ‘wall of worry’ having convinced themselves that all is well with the world, and any evidence to the contrary can be confidently looked past.
