The first few days of July were interesting as the nonfarm payroll reports for June were released. There were some mixed messages in the data that caused some to question the path forward as it relates to monetary policy.
For the month of June, there were 7.77 million available jobs in the United States compared to an expected 7.32 million. This was the highest number of open positions since January when more than eight million jobs were available.
In addition, the ISM Manufacturing PMI came out on Tuesday, and it came in at 49, which was roughly in line with expectations. The report suggests that manufacturing is in a slight contraction period right now. However, the June number was higher than last month’s reading of 48.5.
On Wednesday the ADP nonfarm payroll reported the economy shed 33,000 jobs in June. Analysts had expected a gain of 99,000 jobs. It should also be noted that May’s final number was revised downward to 29,000.
However, on Thursday the Bureau of Labor Statistics (BLS) releasing its version of the nonfarm payroll report. It found that the economy added 147,000 jobs compared to an expected 111,000 prior to the release. It was noted that only 74,000 of those jobs came from the private sector while the rest were mostly related to gains made in state governments.
Unemployment claims figures for the past seven days were also released Thursday. It was revealed that 233,000 people requested benefits during the reporting period, less than the estimated 240,000 claims prior to the report’s release.
Finally, the ISM Services PMI came out late Thursday morning with a figure of 50.8, matching expectations. This means that services are still in a period of relative expansion, and the June figure represents a rebound from the somewhat shocking 49.9 reported for May.
Early this week, Jerome Powell made scheduled comments that were interpreted by some as relatively dovish. He said that July may represent an appropriate time to cut rates, but cuts would already have been underway if it weren’t for Trump’s proposed tariffs. The 90-day pause on tariffs imposed in April are set to expire on July 9.
Over the past five trading days, the S&P 500 finished up about 2 percent to close at 6,279. This is a new high for the year as well as a new all-time high for the index. On Monday afternoon, the market put in the low of the week of 6,182 before beginning a slow climb throughout the rest of the week. It would then close near the high of the week when trading halted on Thursday afternoon.
The Dow followed a similar trajectory as the S&P 500, closing up almost 3 percent over the last five trading days. It closed the week at 44,828, which is also a yearly and all-time high. For the week, the market made a low of 43,945 on Monday afternoon and closed near the high.
The Nasdaq would also finish the week significantly higher. However, unlike the other two indexes, it made its weekly low on Tuesday when it dipped to 20,113 early that morning. It would then reverse and close the week at 20,601, which is a yearly and all-time high.
The FOMC meeting minutes from the June meeting are expected to be released on Wednesday. In addition, unemployment claim data is set to be made public on Thursday. International traders may want to keep an eye on rate announcements from Australia and New Zealand.