Strong labor market, US economy ready for more aggressive FFR hikes. Wall Street closed lower, with Nasdaq down 2.4%, pressured by technology stocks which are
sensitive to higher FFR, as the UST10Y yield returned to near the psychological 3% level last Friday. Data shows May’s Change in Nonfarm Payrolls added 390k (Cons.
318k), while the rate of increase in wages Avg. Hourly Earnings MoM is only 0.3% (Cons. 0.4%), and May’s Unemployment Rate has remained low at 3.6% in the last
three months. This picture of US economic expansion, albeit at a moderate pace, keeps the Fed on a more aggressive FFR hike path.
The pressure of BI aggressively increasing BI 7DRRR declines, as May inflation eased. Data show CPI MoM 0.40% (Vs. Apr. 0.95%); and CPI Core MoM 2.58% (Vs.
Apr. 2.60%). Over the weekend, the JCI was consistent in the green zone, touching the psychological level of 7,200, before finally closing at the level of 7,182. BI 7DRRR remained low, causing a number of banking stocks in the BUKU IV category to dominate Most Active Stocks, in addition to GOTO technology stocks. NHKSI Research projects that the JCI will tend to be mixed today, with a range of 7,100-7,260.
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