Mid-Week Market Minute 6.5.24

Stocks Mixed; Nonfarm Payrolls Report Due Friday

Stocks continued searching for direction in what’s been a choppy start to the month of June. The S&P 500 extended its gains into June, higher by about 0.60% mid-week. Meanwhile, small caps, measured by the Russell 2000 index, were lower by about 1% on the week. Bond investors experienced a strong start to the month of June as the yield on the 10-year Treasury note has fallen from 4.50% at the end of May to about 4.35% today. 

Overseas, India’s stock market weighed on the emerging market indices as India’s Nifty 50 index fell nearly 6% on Tuesday after Prime Minister Narendra Modi’s party fell short of an outright majority in the lower house of parliament. Modi is viewed by the markets as very business friendly, which has helped fuel the impressive rally in India’s stock market over the past several years. Despite Tuesday’s sell-off, the broader market in India is still firmly in positive territory year-to-date. 

On the data front, all eyes will be on the nonfarm payrolls report due on Friday, where economists expect the U.S. economy to have added 185,000 jobs in May. Separately, the unemployment rate is expected to remain unchanged at a very healthy 3.9%. Average hourly earnings are another component of the report, which help provide details into the path of inflation and consumer spending. Average hourly earnings are expected to show a modest uptick of 0.3% for May, which translates into 3.9% growth year-over-year. As a precursor to Friday’s widely followed jobs report, the ADP employment report was released on Wednesday this week, which showed companies added 152,000 jobs in May, below the consensus estimates of 175,000. This softer-than-expected report was supported by Tuesday’s JOLTS job openings report, which showed job openings fell to approximately eight million, the lowest level since early 2021.

Source: GSAM, CNBC, JPMorgan

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