Following the long Memorial Day weekend, stocks kicked off the month of June on a positive note. Strong economic data from Europe and Asia helped boost investor sentiment, leading to a continuation of the outperformance in international developed and emerging markets. Oil jumped higher on Tuesday, with a barrel of WTI Crude trading north of $68 as OPEC agreed to maintain its production cut plans despite improving global demand. For perspective, the average retail price for gasoline in the U.S. jumped above $3 per gallon last week, the highest price since 2014 (U.S. Energy Information Administration). On the data front, investors will be focused on the Non-Farm Payrolls report Friday. Early consensus is for 650,000 new jobs added – 266,000 jobs were added last month. Other key reports this week include the ISM Manufacturing and Services PMI’s, both of which are expected to improve month over month. In bonds, the yield on the 10-year Treasury note spiked on Tuesday before settling around 1.59% by Wednesday. With real yields (adjusted for inflation) still firmly in negative territory in the U.S., we can expect markets to remain laser-focused on the inflation narrative going forward.
Source: GSAM, JPM, FactSet, FactorInvestor
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