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Market Matters

The market reversed from last week as the 10-year is at 2.92%. NonFarm Payrolls will be an important number but in the current climate any inflation data will move the markets the most. The Fed's blackout period begins on June 4th until they have their next meeting, and it sounds like they will be raising rates 50 bps in June. They are striking a hawkish tone and it seems that they will raise rates until inflation comes down significantly, or at least that is the rhetoric heard this week. Best to be defensive here.

 

Initial Jobless Claims

Initial Jobless Claims for the week ending May 28th came in at 200k, a nice beat compared to the market expecting 210k in claims. Continuing Claims for the week ending May 21st was at 1.309mm, also a nice beat compared to the market expectations of 1.34mm. This is still a pretty hot report for the labor market.

 

ADP Employment Report

ADP Employment Report for May was a big miss, coming in at 128k jobs, compared to the 300k the market was expecting. April was revised from 247k down to 202k as well. This is the lowest reading since May 2020. Companies with fewer than 50 employees lost 91k jobs, while larger businesses added 219k jobs. A big miss but we will want to see how this report compares to the Nonfarm Payrolls report coming out.

 

ISM Manufacturing PMI

ISM Manufacturing PMI for May came in hotter than expected at 56.1, beating expectations of 54.5. The New Orders index was up 1.6 points to 55.1, which is a three-month high, while the Production index rose +0.6 to 54.2. "The US manufacturing sector remains in a demand-driven, supply chain-constrained environment," Timothy Fiore, chair of ISM's Manufacturing Business Survey Committee, said in a statement. He added that "sentiment remained strongly optimistic regarding demand, with five positive growth comments for every cautious comment."

 

Case Shiller HPI

S&P CoreLogic Case Shiller 20 city HPI for the month of March was +2.42% MoM, beating expectations of +1.9%, and YoY, the 20-city index was up +21.17%, also above the market expectations of +20.00%. Tampa, Phoenix, and Miami were the cities that reported the highest YoY gains among the 20 cities surveyed.