Yesterday, seven of eleven S&P 500 sectors finished higher, but the market was down on the day without Technology (XLK). 

Interestingly, no factor was positive. 

Queasy 

There isn’t a lot of panic out there, but a sense of nausea is reflected in the Fear & Greed Index gauge, which is ebbing into ‘fear.’ 

Moreover, individual investor bearishness leaped to 32.0% from 26.7% (all coming from neutral).

Market Movers

Tesla (TSLA) was the most traded name, and Musk continued his quest for record CEO payouts.

There are many former high-flyers with fans back on the radar.

Four Utilities (XLU) names are among the biggest decliners. The Artificial Intelligence (AI) hype is a little early.

Jobs Day

Only Federal Open Market Committee (FOMC) & Consumer Price Index (CPI) days move the market as much as jobs day, and we are teed up for a potentially huge move today. 

I think there will be an outsized reaction.

The question is: what does the Street want?

• Good news to be good news?

• Good news to be bad news?

• Bad news to be bad news?

• Bad news to be good news?

Or there may be a combination that sees higher wages and higher unemployment.

Considering the muted reaction in the stock market to bond yields plummeting, I think good news being good news, or bad news being bad news, will be the outcome. 

Keys to Watch 

• Hourly wages

• Work week

• Full-time participation

• Job quality

• Part-time versus full-time 

Then, there are those rooting for a disaster number to usher in rate cuts.

Today’s Session

The jobs report came in better than expected, but with lots of questions marks.  First, we must look at the numbers through the lens of the Federal Reserve. It's no secret that Powell would like to make his cutting move based on the higher U3 unemployment number, which climbed to 4.0% from 3.9%. 

Here’s the rub. 

Powell has mentioned participation enough times for us to know it's important. According to the Household Survey last month, 250,000 folks left the labor force and there were 408,000 fewer employed.

My goodness.

This offsets the 272,000 headline number from the Establishment Survey.

Unemployment rate surging for many. 

The jobs report was too good for Jay Powell to cut rates, but maybe a harbinger of things to come for folks without advanced jobs skills.

Today provides a great test for the resolve of the market, which has climbed off the canvass several times in the past week.

Comments

Best descriptor of the current economy that I have seen in a long time. You should be in Washington or the Fed calling the shots. Mark A Peterson on 6/7/2024 10:07:43 AM

The headline #'s still seems questionable in my mind. The largest job increases in Friday's report were in healthcare adding 68,000, government adding 43,000, and leisure and hospitality adding 42,000 (seasonal?) jobs. Doesn't exactly provide a warm and fuzzy around job heiring or the lack of it elsewhere. Terry Dowler on 6/7/2024 11:08:25 AM

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