Weekly Economic Update for June 7, 2021

In this week’s recap: Positive labor numbers lead stocks to a modest gain

Weekly Economic Update

The Week on Wall Street

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

Rotation Continues

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

T I P O F T H E W E E K

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THE WEEK AHEAD: 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

The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

THE WEEK AHEAD: 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

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

Q U O T E O F T H E W E E K

“When the whole world is silent, even one voice becomes powerful.”

MALAlA YOUSAFZAI

T H E W E E K L Y R I D D L E

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.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested.

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CITATIONS:

1. The Wall Street Journal, June 4, 2021

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