Friends
Expect the unexpected, indeed. Today’s non-farm payroll number was much hotter than expected with 339,000 new jobs created in May which was much more than the 190,000 that analysts expected. The unemployment rate did tick up a tad to 3.7% and average hourly earnings came in at 0.3% which was a little less than expected. So, the combo of plenty of new jobs and not inflated salaries must have been what the bulls were looking for because stocks soared. Finally, the Dow actually led the way after being mostly left behind year-to-date.
By the close, the Dow Jones Industrial Average was up 701 points to finish the day at 33,762. The S&P 500 was up 61 points to close at 4,282. The Nasdaq Composite Index was up 139 points to close at 13,240. Gold was down $30 to trade at $1,964 per ounce, while oil was up $1.83 to trade at $71.93 per barrel WTI.
Today’s buying frenzy certainly was unexpected. Well, let’s just say I was surprised. A hot jobs number might have led to a selloff but the hopes of avoiding a recession entirely, or at least increasing the odds of a soft landing, were in the minds of investors. There has to be some FOMO involved too. Market participants have been positioning for a recession for a year now. What if it doesn’t materialize?
