Commentary
Last week, America’s collective attention was divided between two major events: the country's 250th birthday and the wedding of Taylor Swift and Travis Kelce. Both got wall-to-wall media coverage, while the June jobs report—which actually moved markets—settled for a press release and a shrug.
- U.S. equities finished higher. The S&P 500 rose 1.76% and the Nasdaq increased 2.12%. Communication services and financials led, with the latter sector benefiting from a softer jobs number, which lowers the odds of a rate hike and takes some pressure off banks. Energy sank with crude prices. Large caps beat small caps. Developed international edged U.S. stocks.
- Bond prices fell as long-term yields rose. The Bloomberg U.S. Aggregate Index slipped on the week. U.S. Treasury yields climbed across the board, but the long end went higher than the short end after Federal Reserve Chair Kevin Warsh said prices were still too high and reaffirmed the Fed's push to bring inflation down, keeping a September rate hike in play. Thursday's soft jobs report pulled yields down as investors trimmed hike bets, but not enough to undo the earlier climb.
- Commodities and the dollar: Gold rose to roughly $4,125. Crude slipped to just under $69 as the Iran situation stayed quiet enough to keep a lid on it. The U.S. dollar slipped against the pound and yen and held flat against the euro.
- The June jobs report showed non-farm payrolls rose 57,000, well short of the 110,000 forecast and the weakest gain in four months, with April and May revised down by a combined 74,000. The unemployment rate fell to 4.2%. But check the mechanics before you celebrate: participation dropped 0.3 points to 61.5%, the lowest since March 2021, and the household survey showed 507,000 fewer people saying they had a job. The rate fell not because people found work, but because they stopped looking for it.
- Job openings hit a two-year high. May’s Job Openings and Labor Turnover Survey (JOLTS) reported openings at 7.59 million, the most since May 2024 and well above the 7.3 million expected. The openings that grew were the ones in work boots: manufacturing postings jumped to 558,000 from 493,000 and construction to 330,000 from 272,000. Meanwhile, tech and finance postings shrank.
- Jobless claims were the good kind of boring. Initial claims fell 1,000 to 215,000 for the week ending June 27, the lowest in five weeks and under the 220,000 expected; the four-week average eased to 222,000. Continuing claims rose 2,000 to 1.814 million for the week ending June 20—a three-month high (although still low by any historical measure), a record with roughly the significance of a Dundie Award.
- Manufacturing kept growing, just with less enthusiasm. The Institute for Supply Management's purchasing managers' index (PMI) slipped to 53.3 in June from 54.0, remaining in expansion territory for the sixth straight month. Prices kept rising, but the pace cooled sharply—the index fell to 73.0 from 82.1, the biggest one-month drop since July 2022.
- Consumer confidence rose 0.6 points in June, boosted by gas prices easing off the inflation dread. The trick is in the fine print: May’s reading was revised downward from 93.1 to 90.6, meaning confidence "improved" in June to a level below where May originally stood. And it's still the worst June reading in over a decade. So, the glass is half full. It's also last month's glass…and someone poured a little out when you weren't looking.