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Markets end week with a bang on solid US jobs data

Nearly all major stock market indices ended the week with a strong session on Friday following solid US labour market data released at the end of the week. The employment report contained some mixed data but was interpreted by some market participants as providing the Federal Reserve (Fed) with more room to continue with at least one more interest rate hike in June or July. Treasury yields climbed as a result as traders anticipated another interest rate increase in the coming months.

Shane Strowmatt, LGT
Reading time
5 minutes
US labour market report newspaper

US nonfarm payrolls increased by 339'000 in May, according to surveys conducted by the US Bureau of Labor Statistics released Friday. That figure was much higher than analysts’ estimates of around 180'000 new jobs. Moreover, the gains appear to be broad with increases in diverse fields such as business services, healthcare and government jobs. However, the report also contained mixed signals about the health of the labour market with the unemployment rate rising to 3.7% from 3.5%. Average hourly earnings continued on a stable path, increasing by 0.3%, the same pace as the prior month.

In New York, stock markets finished the week with a bang. The Dow Jones Industrial gained 2.12% Friday to finish the week with 33'762.76 points and the S&P 500 closed up 1.45% at 4282.37 points. The Nasdaq 100 gained 0.73%, ending the week at 14'546.64 points. European markets also ended the week largely in positive territory with the Euro Stoxx 50 closing Friday up 1.55%.

Over the weekend, the oil-exporting group of nations known as OPEC+ said its members will extend cuts to oil supplies into 2024. Saudi Arabia announced additional voluntary cuts of another 1 million barrels per day beginning in July. Consequently, oil prices jumped by more that 1 dollar per barrel to start the new week.

Stock markets in the Asia-Pacific region began the week largely in positive territory. Hong Kong's Hang Seng Index was trading up 0.3% after data showed service sector activity in China increased in May. The services Purchasing Managers’ Index for China increased to 57.1 in May from 56.4 a month earlier. The Shanghai Composite in mainland China was up slightly after the data was released and the Shenzhen Component gained around 0.6%. In Tokyo, the Nikkei 225 continued with strong gains from the month of May, trading up 1.9% and breaking the 32'000-mark to reach its highest level in more than three decades. South Korea’s Kospi was up about 0.6%.

Corporate news in focus: No major corporate news scheduled.

Economic data in focus: Services Purchasing Managers’ Index (PMI) from various countries throughout the day, German trade balance (08:00 CET), Swiss consumer prices (08:30), eurozone producer prices (11:00).

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.

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