A strong, but not too strong, employment report sparked a rally on the final day of trading, propelling stocks to a modest gain for the week.
The Dow Jones Industrial Average climbed by 0.66%, while the Standard & Poor’s 500 added 0.61%. The Nasdaq Composite index increased by 0.48%. The MSCI EAFE index, which tracks developed overseas stock markets, edged up 0.10%.1,2,3
Markets have traded sideways since mid-April, though beneath the surface has been ongoing sector rotation. Last week continued that trend.
While stocks ended on a strong note, the performance of industry sectors varied widely. Energy, real estate, utilities, and a number of reopening stocks performed well, while consumer discretionary, communication services, healthcare, and technology stocks lagged.
The Fed announced on Wednesday that it will soon begin selling the corporate bonds and exchange-traded funds it had accumulated during the pandemic, an action that some observers interpreted as a harbinger of an approaching change in its easy-money policies. But the below-consensus May job figure on Friday buoyed investors who believe the Fed will not change course soon.4,5
Labor Market Recovery
It was a good week for the labor market. Initial jobless claims fell to pre-pandemic levels (385,000), ADP (Automated Data Processing) reported a big jump in private-sector hiring (978,000), and the monthly employment report saw nonfarm payrolls increase by 559,000 in May – a healthy increase even though it fell short of some expectations. The unemployment rate declined to 5.8% from April’s 6.1% level.5,6,7
Friday’s report showed that total employment numbers still remain about seven million jobs below their pre-pandemic levels. It also showed an acceleration in wage gains, which rose 2% year-over-year following the 0.4% gain in April.8
This Week: Key Economic Data
Tuesday: Job Openings and Labor Turnover Survey (JOLTS).
Thursday: Consumer Price Index (CPI). Jobless Claims.
Friday: Consumer Sentiment.
Source: Econoday, June 4, 2021
This Week: Companies Reporting Earnings
Monday: Marvell Technology, Inc. (MRVL), Coupa Software (COUP).
Wednesday: Campbell Soup Company (CPB), Brown-Forman Corporation (BF.B).
Thursday: Chewy (CHWY).
Source: Zacks, June 4, 2021
“When the whole world is silent, even one voice becomes powerful.”
– Malala Yousafzai
Are You Prepared for a Natural Disaster?
Natural disasters such as hurricanes, earthquakes, or fires can happen at any time which is why it's important to be prepared before disaster strikes. Here are a few tips to help you prepare in case anything happens:
The best time to prepare for an emergency is always when you don't need to, not after the fact. These tips will help you have everything you need ready in the case of a natural disaster or other emergencies.
* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov9
Picking Up a Creative Hobby is About More Than Passing the Time
Creative hobbies like writing, knitting, making clothes, and many more are about more than just passing time. In fact, creative hobbies and side projects can make you happier, healthier, and more productive.
When considering a side project or hobby, experts suggest picking something up that's low-risk, low-pressure and a labor of love. The difference between a creative hobby and a creative project is that creative hobbies are ongoing and don't have a dedicated end goal. Side projects are projects that have a goal at the end of the tunnel. For example, your creative hobby could be writing, and your side project could be writing a book.
Coming up with a project or hobby can provide a big psychological lift and a boost to work productivity. Find something that’s low-risk, low-pressure, and a labor of love, and you've found your project.
Tip adapted from Fast Company10
I have cities, but no houses. I have mountains, but no trees. I have water, but no fish. What am I?
Last week’s riddle: What is placed on a table and cut, but never eaten? Answer: A deck of cards.
Arches National Park, Utah.
Footnotes and Sources
2. The Wall Street Journal, June 4, 2021
3. The Wall Street Journal, June 4, 2021
4. The Wall Street Journal, June 2, 2021
5. CNBC, June 3, 2021
6. CNBC, June 3, 2021
7. CNBC, June 4, 2021
8. CNBC, June 4, 2021
9. IRS.gov, September 23, 2020
10. Fastcompany.com, July 17, 2019
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Weekly Market Insights: Labor Numbers Positive
June 10, 2021