Market Week: June 05, 2023

The week in review

  • Consumer confidence fell to 102.3 in May
  • JOLTS openings rose to 10.1M in April
  • Nonfarm payrolls increased 339,000

The week ahead

  • Services ISM

Thought of the week

Last week, investors received a large bundle of data related to the jobs market. There is some indication of future weakness, but overall the jobs data mosaic points to normalization at a gradual pace. The May employment report showed a net creation of 339,000 jobs, above expectations and an uptick compared to April’s 264,000. Some signs of softness included a move higher of 0.3% in the unemployment rate to 3.7%. In addition, wage growth eased to 0.3% m/m, bringing the year-over-year rate down to 4.3%.

The April JOLTS data was also mixed: job openings were surprisingly high, moving up to 10.1M, the first increase this year and still significantly above the 2019 average. On the other hand, the quits rate fell to 2.4%, its lowest level since February 2021, edging closer to the 2019 average. This signals that workers feel less comfortable leaving their jobs or that the quality of jobs available is potentially declining. Overall, the labor market is showing signs of stabilization rather than weakness, bolstering the possibility of a soft landing.

Historically, spikes in unemployment have significantly lagged the onset of rate hikes. However, given the speed and intensity of the recent tightening regime, it would not have been surprising to see a greater rise in jobless claims and layoffs already taking shape. The labor tightness created by the pandemic recovery may be helping the job market avoid any sudden drop-offs.

We think recent data supports a Fed pause at the June meeting, as it waits to see which way the labor market data breaks: normalization or a bigger slowdown.

Click here to download a PDF of this report.

Securities offered through LPL Financial, Member FINRA/SIPC. E2E Financial is another business name of Independent Advisor Alliance, LLC. All investment advice is offered through Independent Advisor Alliance LLC, a registered investment advisor. Independent Advisor Alliance is a separate entity from LPL Financial.

The information contained in this e-mail message is being transmitted to and is intended for the use of only the individual(s) to whom it is addressed. If the reader of this message is not the intended recipient, you are hereby advised that any dissemination, distribution or copying of this message is strictly prohibited. If you have received this message in error, please immediately delete.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. Investing involves risk including the possible loss of principal.

The S&P 500 is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States. Indexes are unmanaged and cannot be invested in directly.

The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
The Bloomberg U.S. Aggregate Index represents the U.S. investment-grade fixed-rate bond market. This index is unmanaged, and its results include reinvested dividends and/or distributions but do not reflect the effect of sales charges, commissions, account fees, expenses or U.S. federal income taxes.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Market Index captures broad US equity coverage. The index includes 3,204 constituents across large, mid, small and micro capitalizations, about 99% of the US equity universe. Indexes are unmanaged and cannot be invested in directly.
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

ARE YOU READY TO TAKE YOUR PRACTICE TO THE NEXT LEVEL?