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By Matthew
Klein | Friday, June 4 Goldilocks. The jobs
numbers published today by the Bureau
of Labor Statistics weren’t too hot or too
cold for investors. With half a million private sector jobs added in May, the
recovery looks to be broadly on track after April’s disappointing gains. But
the increase wasn’t so strong that anyone should be worried about inflationary
“overheating” or interest rate increases from the Federal
Reserve. The basic
reason is that the cyclically-sensitive construction, manufacturing, and
truck-driving sectors have entered a bit of a funk even as employment
rebounds at bars, restaurants, hotels, and public and private schools.
Outside of education and leisure and hospitality, payrolls rose
just 123,000. Job losses continue to mount at grocery stores as consumers
return to eating out. And outside
of leisure/hospitality and education, employment remains more than 3%
below where it was before the pandemic, for a shortfall of roughly four
million workers. That’s the kind of thing that Fed governor Lael
Brainard was talking about when she
said earlier this week that “the economy is far from our
goals.” Investors
responded accordingly today, pushing down yields on longer-term U.S. Treasury
debts and pushing up the prices of stocks, oil, and metals. Real yields
on 30-year Treasury Inflation-Protected Securities hit their lowest level
since the middle of February, down about 0.3 percentage point since the peak
in mid-March. The S&P
500 rose 0.9%, with 10 of 11 sectors in positive
territory, while the Russell 2000 index of small cap stocks was up
0.3%. Stocks in Canada and Europe were also up, with the TSX and the STOXX
600 both
hitting new records. Defensive
utilities were down slightly, with the rally led by technology, communication
services, and consumer discretionary names. Biotech, hardware, software, and
semiconductor companies led the pack. Biogen, Tesla, IPG
Photonics, Take-Two
Interactive Software, Autodesk, Nvidia, and Twitter were
the day’s biggest winners. Construction,
materials, and transportation companies were among the day’s worst
performers, including Mosaic, American
Airlines, Martin
Marietta Materials, Vulcan
Materials, Old
Dominon Freight Line, J.B.
Hunt Transportation Services, United
Airlines, FedEx, and United
Rentals. Watch our TV
show on Fox Business Fridays at 10 p.m. or 11:30 p.m. ET; Saturdays at 10
a.m. or 11:30 a.m. ET, or Sundays at 7 a.m., 10 a.m. or 11:30 a.m. ET. This
week, insights on valuations for the market, meme stocks and crypto. |
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DJIA: +0.52% to 34,756.39 The Hot
Stock: Biogen +5.0% Best Sector:
Technology +1.9% |
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