U.S. Equity Markets reversed some of Friday’s aggressive sell-off to start the week on a positive note, led by the 0.41% gain in the NASDAQ 100. Investors remained focused on some of the positive data that came out of Friday’s Jobs report. However, they remained cautious following comments from JPMorgan Chase and Goldman Sachs about the U.S.’s economic outlook… This caution, along with the news coming out of China, Ukraine, and the U.S. Federal Reserve, resulted in mixed confidence that is helping to drive the recent series of daily rallies and declines. Many remain uncertain about whether inflation has peaked and when it may eventually come down. But for now, China’s reopening measures have helped to slightly boost some markets for the day. Regardless, a key test for the U.S. and other global markets will arrive Friday, as the U.S. Consumer Price Index (“CPI”) will release its most up-to-date figures. I expect the data will show an 8.2% increase in prices in May versus the same period last year. The U.S. Bureau of Labour Statistics’ Job Openings and Labour Turnover Survey’s Non-Farm Payroll data for May showed 390,000 new hires last month versus the anticipated 318,000. Meanwhile, April’s job gains were upwardly revised from 428,000 to 436,000 – suggesting the U.S. economy is continuing to grow amid a tighter job market, as more people working implies there are more individuals with money to spend. These factors, coupled with an unchanged Unemployment rate for May, support the Federal Reserve’s recent 0.5% interest-rate hike and outlook for raising interest rates to 2.5% by the end of 2022. Within the S&P 500, 8 of the 11 sectors finished higher. European Markets closed higher. Equity markets were closed in Austria, Denmark, Norway, Sweden Ireland, and Switzerland for the holidays. Russia’s military launched a missile strike against the Ukrainian capital of Kyiv for the first time in over a month, signalling Moscow’s resolve to continue its assault. British Prime Minister Boris Johnson won his Leadership Contest Vote last night, but his authority has been severely undermined given the fact that 148 MPs voted against him which was over 40% of the vote. The European Central Bank is scheduled to release its latest policy announcement on Thursday, with investors awaiting more information on its rate-hike plans. In Asia, Equity markets were closed in Malaysia, New Zealand, and South Korea for the holidays. Bank of Japan Governor Haruhiko Kuroda said the economy is not at a point where it can handle higher interest rates and reiterated that ongoing stimulus is still needed. China’s National Bureau of Statistics releases its May CPI data on Friday, with inflation growth anticipated to match April. The government in Beijing said it will begin removing restrictions so that employees can return to work, restaurants can reopen, and cinemas can resume operations once again. Elsewhere, Oil fell 0.15% while Gold declined 0.5% on Dollar strength.
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