By Bill Hornbarger, Chief Investment Officer
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Three Things to Watch
- Jobs are on deck this week with the May employment report due on Friday. Hiring growth is expected to slow, with nonfarm payrolls anticipated at 125,000 versus the three-month average of 155,000, and after the previous two reports were better than expected. The unemployment rate is expected to hold steady at 4.2%. Companies remain cautious on hiring as trade policies remain uncertain.
- Investors will have multiple U.S. Federal Reserve (Fed) speakers on the tapes along with the Beige Book report on anecdotal evidence about the economy. Fed Chairman Powell speaks Monday afternoon, while Fed Governors Lisa Cook, Adriana Kugler and Christopher Waller will deliver comments on the economic and policy outlook. Futures are currently pricing two Fed cuts over the balance of 2025, with real GDP expected to grow 1.4%.
- Other highlights include the Job Openings and Labor Turnover Survey, or JOLTS, data, which is expected to show the lowest number of job openings since the end of 2020, and the Institute for Supply Management (ISM) surveys. Manufacturing is forecast to remain below 50 (contracting) while the ISM Services reading is expected to increase slightly to 52.1.
Three Things to Know
- The Bank of Japan’s unrealized losses from government bonds hit a record $198 billion in fiscal-year 2024. Paper losses have tripled from the previous year’s ~$66 billion. This comes as Japan’s 10-year yield doubled in one year to ~1.5% at the end of March. (Source: The Kobeissi Letter)
- The Bloomberg gauge of the Magnificent Seven (Apple, Alphabet, Amazon, Meta, Nvidia, Microsoft, Tesla) accounts for a third of the S&P 500 Index and has accounted for approximately half of the S&P 500’s rally from the April bottom. (Source: Bloomberg)
- With 91% of companies reported, S&P 500 operating earnings are on pace to hit another record high (trailing 12 months), up 10% over the last year. (Source: Charlie Bilello)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.