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WEEKLY SUMMARY: Momentum melts down as bonds & bullion were bid
Major U.S. stock indexes finished the holiday-shortened week mixed, with the Nasdaq, S&P 500, and the Dow Jones advancing while the Russell 2000 declined. We note that Momentum stocks fell 18% on Wednesday & Thursday. U.S. markets were closed on Friday in observance of the Independence Day holiday. On the macro front, the U.S. economy added 57,000 jobs in June, missing estimates (110,000) and marking the softest reading since February’s negative print. Prior months were also revised lower. The unemployment rate ticked down to 4.2%. Following the report, the probability of a rate hike at the Fed’s July meeting dropped from around 29% to about 18%, according to the CME FedWatch tool. On Wednesday, private payrolls firm ADP also reported that private employers added a lower-than-expected 98,000 jobs in June, down from 122,000 in May. Consumer confidence remains subdued while manufacturing activity dips. U.S. Treasuries yields increased across most maturities, though shorter-term yields largely declined on Thursday following the weaker-than-expected payrolls report. In the rest of the world, the STOXX Europe 600 Index finished up 1.96% in local currency terms. Japan's stock markets generated mixed returns through Thursday, with the Nikkei 225 Index declining 0.91% while the broader TOPIX Index gained 1.30%. Oil deepened its slide below pre-war levels as flows from the Persian Gulf soared, heightening the prospect of a supply surplus. Bitcoin is back above $60.
Have a great weekend
Charles & Syz Lab Research
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