For investors, the day is a relief once worries about the debt ceiling are over. The economy of the United States Despite the slowdown in some indicators and the tightening of financing conditions, job creation continues to be faster than expected.
According to the Labor Department report released on Friday The US added 339,000 jobs in May, well above forecasts by analysts who, according to the consensus of experts, spoke of 190,000 jobs. The The number seals the twenty-ninth straight monthly increase.
The The unemployment rate was 3.7%slightly above the 3.5% estimate, but still near the lowest level since 1969. Despite the numerous obstacles the economy is facing, such as the impact of the Covid-19 pandemic or the recent financial strain in 2023 due to bank failures and rising interest rates, the labor market is showing resilience and growth.
The Department of Labor report suggests that wage pressures remain active and they threaten to slow disinflation toward the 2% target that continues to mark Federal Reserve (Fed) action.
exactly these Overheating of the labor market will put renewed pressure on the central bank continued to raise interest rates at their June and July meeting, despite the fed has indicated that it may be appropriate to pause after trading in the 5%-5.25% range in May.
“Non-farm payrolls numbers, well above expectations, could increase the likelihood of the Fed ‘acting’ again in June, which may be troubling investors, particularly those operating in the bond markets Discomfort causes,” says the press release Juan J. Fernández-Figares, of Link Management.
Despite an opening marked by doubts, the stock markets started the new month of June with gains. The S&P 500 and Nasdaq Composite closed up 0.99% and 1.28% respectively yesterday, their highest levels since August. The Dow Jones industrial index gained 153.3 points or 0.47%.
As the week draws to a close, both the S&P and Nasdaq are on track to end the week with modest gains of 0.37% and 0.97%, respectively. However, by Thursday’s close, the Dow was down 0.1% for the week.
Investors appear to be celebrating the end of worries about the debt ceiling as lawmakers gave the green light to the deal reached between Biden and McCarthy last weekend, just days before the June 5 deadline set by US Treasury Secretary Janet Yellen. Fears that the US could default had worried Wall Street in recent weeks.
Now the eyes begin to turn the next meeting of the Federal Reserve on June 14th, in which the market expects a pause in the rate hike path that the institute has been following since last year. But much could depend on the macroeconomic references that will become known in the coming days.
The 10-year debt is yielding 3.618% in the secondary market, up less than a basis point, while the 2-year is yielding 4.351%, also practically the same as yesterday.
Among the market leaders, shares of Lululemon Athl rose 12% this Friday after the company beat market expectations with its first-quarter results. The company got EPS expected to be $2.28 versus $1.97Sales of 2,000 million were also above the expected 1,920 million. “Results, which beat estimates for the fourth consecutive quarter, demonstrate continued demand for its sports products,” Bankinter analysts said in a note. For the year, the group forecasts sales of 9,500 million compared to 9,400 million previously.
The MongoDB market also surprised on the upside, soaring 22% in pre-opening. The database software maker posted earnings per share of 56 cents, well above the 19 cents the market was expecting. Revenue of $368 million also beat expectations of $347 million.
As for the forecasts, according to the management of the company expects fiscal second quarter earnings of 43 to 46 cents per share on sales of $388 to $392 million. Analysts had expected adjusted earnings per share of 14 cents and revenue of $362 million.
On the negative note, SentinelOne shares fell 35% after the cybersecurity provider lowered its revenue forecasts. SentinelOne expects revenue to be between $590 million and $600 million, while the previous guidance was $631 million to $640 million. Analysts had forecast sales of $637.1 million for the year. The company posted a lower-than-expected loss per share in the first quarter, but revenue came in slightly below Wall Street estimates.
In the commodity markets Oil prices are little changed ahead of this weekend’s OPEC+ meeting. It is not likely that the oil cartel will deepen production cuts at the next meeting, it said. Reuters citing Alliance sources.
“Yes [la OPEP] “If nothing happens, we could see a price drop, as we saw this week,” warns Matt Smith, chief oil analyst at Kpler. Smith predicts that Brent prices could fall as low as $70 a barrel if OPEC maintains the status quo.
Currently, Brent crude is up 1.55% to $75.89, while US West Texas is up 1.54% to $71.67.
The euro is up 0.11% against the dollar today, giving each individual currency an exchange rate of $1.0773.