Author: Zac Martin, Senior Investment Analyst
Week Ending July 2nd
Another relatively quiet week as markets continue to trade with a sideways pattern. The JOLTS report and nonfarm payrolls reported this past week, however, markets seemed rather agnostic to the information. Regardless, the main story continues to be a broadening out of the S&P 500, with the equal weight index increasing by 2.19% versus 1.76% for the market cap weighted index. One story that may be contributing to the broadening out is the report that Meta may begin to sell its surplus compute. This could be an indicator that AI related compute has been overbuilt in recent years, software related companies outperformed the broader tech sector over the week as a result.
The Employment Situation: Nonfarm payrolls slowed for June, reporting 57k versus 172k in May. Additionally, revisions to May and April were substantial, with both months being revised downward by a combined amount of 74k. Therefore, May job growth is estimated to be 129k and April is 148k, which is still above the original estimate of 115k. Finally, the JOLTS report remained relatively unchanged month-over-month regarding job openings, hires, and total separations. The main takeaway from these two reports is that employment remains stable and may signal that the Fed will maintain their focus on the inflation aspect of their mandate rather than the employment side.
The Week Ahead:
- FOMC Minutes (7/8)
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