[Platinum Insights] (6.2.23)

Good morning.  

U.S. stock index futures rose in the early hours of Friday after the country narrowly averted a debt default, with focus now shifting to payrolls data that will determine whether the Federal Reserve sticks with its interest rate-hiking regime.  

The Labor Department’s closely watched employment report is expected to still show a tight labor market. The unemployment rate is forecast climbing to 3.5% from 3.4% in April, while nonfarm payrolls is seen increasing by 190,000 jobs last month after rising 253,000 in April.  

The S&P 500 is up 8.9% so far in 2023, or 9.7% including dividends. But the lion’s share of that increase is due to the surging prices of a few of the largest companies. The big five that are responsible for the vast majority of the stock market’s 2023 gains are Apple (up 36% this year), Microsoft (37%), Alphabet (39%), Amazon (44%), and current stock market darling Nvidia, which has surged 159% on AI-related excitement. Without them, the overall market (including dividend payments) would be up just 1.5% this year, according to data provided by Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.  

WTI crude futures steadied near $71 per barrel. Gold rose to around $1,980 an ounce while the yield on the US 10-year Treasury note was little-changed at 3.6%.  

The unemployment rate in the US increased to 3.7 percent in May 2023, the highest since October 2022 and above market expectations of 3.5 percent. Despite this uptick, the jobless rate remained historically low and suggested the labor market remained tight. 

The number of unemployed people increased by 440 thousand to 6.10 million and employment levels declined by 310 thousand to 160.72 million. The so-called U-6 unemployment rate, which also includes people who want to work, but have given up searching and those working part-time because they cannot find full-time employment, rose to 6.7 percent in May, also above forecasts of 6.6 percent. 

The labor force participation rate was unchanged at 62.6 percent, remaining at its highest level since March 2020.

Have a great weekend!  This information is provided for educational purposes and is not a recommendation to buy or sell a security.