Market Snapshot 6/7/24 – Big Day For Data

Good morning on this Friday AM from your Hometown Lender,

Today is the big day for data.

The jobs report always causes volatility and today was no different. On expectations of 180k new jobs being created, the report showed 270k… The unemployment rate did tick up a bit to 4.0% which is the highest in years. Bonds and stocks are both under pressure and we are seeing rates up by .125% today. Hoping for cooler heads to prevail seeing that BLS data suggests that U.S. payroll gains were not as robust as reported in 2023, and the overestimate may have been 60k a month. This would indicate that the job market is weaker than the Fed thinks, though the central bank does understand that job gains and pay growth are slowing going into the second half of the year, and there are notable pockets of weakness tied to both producers and consumers.

The global rate-hiking cycle is seemingly done as the strength of labor markets around the globe weakens.

The European Central Bank, in a widely expected move, cut its benchmark rate 25 basis points to 3.75 percent yesterday. It was the ECB’s first rate cut since 2019, though the central bank was quick to caution investors that it is not committing to any predefined rate path and that forward looking policy will remain data dependent, all but ruling out another cut for July. That came on the heels of the Bank of Canada cutting rates on Tuesday. June Fed Funds futures don’t see a cut when the Fed meets next week. However, markets are now pricing in nearly two full 25 basis point cuts before year-end as this week’s weaker than anticipated private payroll readings from ADP and a decrease in job openings have investors excited about the prospect of rate cuts from the Fed.

I thought the below 2 graphs are interesting as they show housing’s expected continued price appreciation.