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Stocks Rally on a Goldilocks US Nonfarm Payrolls Report

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US index futures have moved higher, and ae now up about 0.2% while the US 10-year treasury note yield has declined slightly in the wake of today’s US nonfarm payrolls report. Commodities are also on the rise again today with WTI crude oil and copper both up about 0.6%.    

Nonfarm payrolls increased by 559K in May, an acceleration from the 278K jobs added in June but less than the 650K analyst consensus (let alone any fantasies of higher numbers that may have emerged after yesterday’s stellar ADP payrolls report). Meanwhile, the unemployment rate beat expectations (5.8% vs street 5.9% and previous 6.1%), but this was partially offset by a pickup in wage growth (2.0% over year vs street -0.4% and previous 0.4%).

Overall, the US job numbers appear to have come in strong enough to indicate the economy continues to recover, but not strong enough to force the Fed to cut back its stimulus program.

Canadian employment numbers for May came in even worse than feared with jobs declining more than expected with most of the country still in lockdown (-68K vs street -20K and previous -207K)).

The parade of economic reports continues later this morning with US factory orders (street -0.2%) and Canadian Ivey PMI (previous 59.9) due at 10:00 am EDT.  US President Biden is scheduled to speak at 10:15 am as negotiations on his infrastructure package continue.

Although fewer in number, earnings reports continue to roll in well above street expectations. Highlights of overnight reports include Lululemon ($1.16 vs street $0.91), Broadcom ($6.62 vs street $6.43), and DocuSign ($0.44 vs street $0.28).

Disclaimer: SIA Wealth Management Inc. (SIAWM) specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIAWM nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.

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At SIA Wealth Management everything we do is based on Relative Strength Analysis. We evaluate the Relative Strength between asset classes giving us insight into money flows on a large scale, and from this select top ranked investments.

Colin Cieszynski, Chief Market Strategist
Market Commentary:

Colin Cieszynski, CFA, CMT
Chief Market Strategist
ccieszynski@siawm.com
+1 (647) 282-4428

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