An Uncertain Market
Stocks experienced wild swings last week, in part, due to ongoing uncertainty over economic health and the path of inflation. Investors seemed conflicted when interpreting the data, in some instances viewing economic strength as a negative since it may mean more aggressive rate hikes from the Fed.
Illustrative of how this uncertainty has played out, stocks surged higher on Thursday despite comments from Fed Vice Chair Lael Brainard indicating it’s unlikely that the Fed will pause on rate hikes. Then on Friday, stocks dropped as a better-than-expected jobs report raised concerns about monetary policy.
Some gloomy headlines are coming out of Wall Street lately. Have you noticed?
In recent days, I’ve read things like “Brace yourself for economic hurricanes” and “Wall Street investor survey paints a dire outlook.” It makes you wonder where the bullish thinkers have gone.
While negative headlines are eye-catching, a gloom-and-doom perspective misses some finer details. For example, look at how positively the financial markets reacted when the Fed’s May meeting minutes were released. What does this indicate? To start, investors feel confident in the Fed’s plan for interest rates. Also, three out of four companies posted positive earnings and strong revenue in the first quarter. It’s important to remember that companies are healthy, even if that doesn’t make for the most sensational news.
Bearish sentiment may be trendy, but keeping a broad perspective never goes out of style.
Strong Job Growth
The U.S. economy added 390,000 jobs in May, a slowdown from recent months but higher than consensus estimates. Job gains registered in several categories, led by leisure and hospitality, professional and business services, and warehousing and transportation. The retail sector lost jobs.4
The unemployment rate remained unchanged at 3.6%. Wage growth cooled off, with a 12-month increase of 5.2%, down from April’s year-over-year jump of 5.5%. Finally, the labor participation rate ticked higher again, reflecting how job availability is helping to pull Americans off the labor-market sidelines.5
This Week: Companies Reporting Earnings
Monday: Coupa Software, Inc. (COUP).
Wednesday: Campbell Soup Company (CPB).
Thursday: DocuSign (DOCU).
Source: Zacks, June 3, 2022
"I can accept failure. Everyone fails at something. But I can't accept not trying. Talent wins games, but teamwork and intelligence wins championships."
– Michael Jordan
How to Make Hummus
Hummus is a dip made primarily from garbanzo beans and is great on pita bread, veggies, or chicken. Here’s how to make hummus:
Tip adapted from Inspired Taste7
Paragliders above Lake Achen, Tyrol, Austria
Footnotes and Sources
2. The Wall Street Journal, June 3, 2022
3. The Wall Street Journal, June 3, 2022
4. CNBC, June 3, 2022
5. CNBC, June 3, 2022
6. IRS.gov, January 13, 2021
7. inspiredtaste.net, February 22, 2022
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Market Insights: Stocks Slip on Mixed Economic News
June 06, 2022|