Welcome to Extreme Investor Network, where we provide unique insights and valuable information on all things finance. Today, we will dive into the recent market movements and how they could impact your investment strategy.
US stocks ended higher on Tuesday, with the 10-year Treasury dropping as investors reacted to the latest economic data. The JOLTS report released on Tuesday showed job openings at their lowest level in over three years, signaling a cooling economy. This has eased pressure on the Federal Reserve to keep rates elevated, leading to increased expectations for rate hikes later this year.
The decrease in job openings has reinforced expectations for the Fed to cut interest rates, with futures markets now pricing higher odds for a policy pivot in September. The cooling labor market also contributed to a Treasury rally, with yields on the benchmark 10-year note dropping over seven basis points.
According to Comerica’s chief economist Bill Adams, the shift from a red-hot job market to a considerably cooler one has alleviated concerns about wage-price pressures and inflation. Federal Reserve Chair Powell has indicated that further interest rate hikes are unlikely, given the current economic conditions.
Looking ahead, more labor data is expected on Friday with the release of May’s payroll figures. Consensus estimates anticipate the addition of 178,000 jobs in May, following similar figures in April. A reading of 125,000-175,000 jobs added would be considered optimal by Bank of America, signaling continued strength in the labor market without the need for prolonged interest rate hikes.
In the commodities, bonds, and crypto market, West Texas Intermediate crude oil fell while Brent crude inched up. Gold prices slumped, while the 10-year Treasury yield dropped and Bitcoin saw an increase.
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