Market Perspective for June 5, 2023 – Mutual Fund Investor Guide


The final week of May saw several significant news releases that will likely have an impact on market sentiment during the second half of the year. On Tuesday, the Conference Board Consumer Confidence Index was released and found that consumers were generally less optimistic about the economy in April than they were in March. The figure for April came in at 102.3, which was down from 103.7 a month earlier. However, it was still higher than analyst’s forecast of 99.1.

On Wednesday, the Bureau of Labor Statistics (BLS) released the May Job Openings and Labor Turnover Survey (JOLTS). It found that there were 10.1 million job openings in the United States, which was an increase from 9.75 million in April and was also higher than the forecast of 9.41 million openings.

On Thursday, three reports were released. The Automatic Data Processing, Inc. (ADP) nonfarm employment report was released, and it found that there was a net gain of 278,000 jobs over the past month. Prior to the release, it was believed that the economy only gained 173,000 jobs over the previous 30 days.

Unemployment claims data was released and showed that there were 232,000 claims made over the previous week, which was in line with expectations. Finally, the Institute for Supply Management (ISM) released its manufacturing index, which came in at 46.7 percent. This figure was also roughly in line with what was expected prior to the release.

On Friday, the average hourly earnings report was released, which indicated that earnings were up .3 percent over the past month. However, it was slightly lower than the expected .4 percent increase during that period. The latest unemployment rate was 3.7 percent, which was an increase from 3.4 percent over last month.

This increase was although the economy added 339,000 jobs during the past month. After the report was released, some economists speculated that there may be an error in the data as job gains are typically accompanied by a greater increase in average hourly earnings. Economists also noted that average hours worked per week also eased down, which would further indicate weakness in the economy.

The other piece of big news this week was the passage of a debt ceiling bill that would suspend the debt limit until 2025. A compromise bill passed through the House on Wednesday before being passed by the Senate and signed into law on Friday night. If an agreement had not been reached before Monday, there was a chance that the government would have defaulted on its debts.

At the close of trading on Friday, the S&P 500 was at 4,282, which was a gain of 2.92 percent for the week.  The Dow 30 would also finish the week in the black at 33,762, which was an increase of 2.84 percent over the previous week.

Finally, the NASDAQ also finished the week higher while also outperforming the other two major indexes. On Friday, the technology index closed at 13,240, which was an increase of 3.94 percent on the week. It hit its low on Wednesday when it dipped to 12,898 before finishing the week on a strong note.

This upcoming week is a relatively light one in the United States. The only major news reports are the ISM Services PMI release on Monday and unemployment claims data scheduled to be released on Thursday. However, central banks in Australia, Canada and throughout Europe are expected to release CPI or other important data that might influence what the Fed does on June 13.



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