The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Good enough
Nonfarm payrolls (+57k vs +113k est & 129k prior revised from 172k) were a bit light but markets liked it just the same. Equity futures rallied and yields came in. The effect was fleeting however. The S&P opened about +25, rallied to +57, and then rolled over, going negative before noon. Yields also wandered around over the day but they climbed consistently in the afternoon. The climb in yields coincided with the drop in stocks. In other markets, crude was essentially flat. The Dollar weakened. Precious metals climbed. Bitcoin rallied too.
If investors were worried about what the nonfarm data might say, they can probably breathe a little easier. This data *should* back off pressures to raise rates inside the Fed. The concern of a hawkish Fed has kept the lid on equity rallies and has resulted in bearish bond action. The new Fed Chair is a wild card and perhaps this labor data doesn’t alter things much but it seems to favor the status quo in the near term. That isn’t exciting the risk-takers today but at least it didn’t send them running for the hills either.
The long weekend is here and US investors can preserve their narrative about the economy and the markets. They didn’t have to change their views with the latest print from the labor market. That suggests that we can resume the usual investing behaviors next week. That, of course, favors the bulls.
Surprise headlines can always upset the applecart but if geopolitical actors refrain from agitating for a few days, it seems like capital will seek out risk when we go back to work next week.
Happy Fourth of July, see you Monday.
-Mike
Visdom Market Commentary
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