Economy
Is the job market back? The US economy added 172,000 jobs in May, stringing together the highest level of job creation in a three month period since late 2023 into early 2024. In the last three months employers have added 565,000 jobs while the unemployment rate has remained steady at 4.3%. The positive employment reports combined with the recent surge in inflation has set the table for the Fed, under new leadership of Trump-appointed Kevin Warsh, to raise interest rates before the end of the year. CME FedWatch has the odds of this happening at 70%.
Markets
With a healthy amount of profit-taking on Friday, the S&P 500's weekly win streak came to a close at 9. Heavy selling pressure brought the weekly loss for the index to -2.59% as markets reacted to positive jobs reports and the increasing likelihood of higher interest rates on the horizon. The declines were led by technology stocks, specifically in semiconductor and chip stocks. The Nasdaq suffered its worst single day in over a year, falling more than 4% on Friday. Still, the narrative around the bull market remains intact as we close out a phenomenal quarter of earnings reports and head into the back half of the year. Perhaps Friday's decline in the overall markets could be viewed less as a "panic sell everything" event and more as rotation from a (very large) part of the market into another. While semiconductor stocks were down 10%, financial stocks were positive on the day.
What We're Reading
- Kevin Warsh's Job Just Got a Lot More Complicated- WSJ
- How Much Should Retirees Worry About Inflation?- Morningstar
Have a great weekend.
Dogwood Wealth Management