Goldilocks Came – Media Labeled “Weak” and “Stronger”

On Friday, I offered that an employment report with 125,000 to 150,000 new jobs created in May would be Goldilocks, not too hot and and not too cold. The government reported that the economy created 139,000 new jobs in May, slightly more than expected. Wages also grew more than expected. On the surface this was a solid number given the length of the recovery.

However, April and March saw significant downward revisions by 30,000 and 65,000 respectively. Purely speculating, that weakness was related to tariff uncertainty. It is important that we do not see May revised sharply lower and that June doesn’t create less than 100,000 new jobs.

The Wall Street Journal called the report “weak” while its sister publication, Barrons, labeled the report “stronger”. You can’t make this stuff up. I searched some more online and found equally contradictory comments. I just shrug my shoulders and chuckle.

Reaction from the stock market was solid with an across the board rally. The S&P 500 closed at the 6000 area I had been looking for as a possible place for short-term peak.

The NASDAQ 100 remains close to revisiting its all-time high. While I do not think that’s coming before a pullback later in June, it remains a possible scenario.

The Russell 2000 which I wrote about late week as an opportunity was the big winner. It looks like it has further to go.

Finally, the yield on the 10-Year Treasury surged higher to 4.51%. That surprised me. I would have thought a much more muted response was in order. Perhaps the Treasury market was worried about slower growth or recession which would cause the amount of debt sold to increase.

A longtime reader asked what happened to my Friday comments about the weekend and the weather. She reminded me that I haven’t said anything since winter. Well friends, Mother Nature has not been kind to the good folks in CT. At a party on Saturday folks were lamenting 15 straight weekends with rain, something I did not realize. The winter drought is long gone and now we have more water than we know what to do with. I am still waiting for that string of sunny day in the upper 70s to enjoy spring.

On Friday we bought more QLD.