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Weekly Commentary

ND&S Weekly Commentary 6.7.21 – Equities Limp Higher

Markets again closed the week in positive territory thanks to a Friday rally that came after a weaker-than-expected payroll report. The economy added fewer jobs than anticipated and wage gains were relatively tame suggesting the Fed won’t be forced to act on its interest policy anytime soon.

For the holiday-shortened week, the S&P 500 increased 0.88% while the DJIA finished 0.52% higher. The best performing sectors were energy, real estate, and financials. International markets were mixed with developed (MSCI EAFE) up 0.85% and emerging (MSCI EM) slipping 0.15%. The yield on the 10yr U.S. Treasury ticked lower to close at 1.56%. Gold prices declined to $1,889/oz. – down 0.67%. Oil jumped to $69.62/bbl – up 4.98% last week.

Economic data released last week was mixed. The big economic news was that the economy added 559,000 jobs in May, a miss against expectations for an increase of about 671,000. As a result, the unemployment rate declined 0.3 percentage points to 5.8% which was slightly better than estimates. The labor force participation rate, which accounts for the number of Americans looking for work or currently employed, dropped to 61.6%. In other economic news, the Institute of Supply Management (ISM) reported the manufacturing PMI index in May increased to 61.2%. The services PMI for May also came in better-than-expected. Jobless claims last week were 385,000, the lowest level for initial claims since the Covid-19 outbreak.

For now, we remain cautiously optimistic about equity markets. Investors should continue to maintain risk exposure in-line with one’s long-term investment objectives and goals. Let’s make it a good week!

“There are no shortcuts in evolution.” – Louis D. Brandeis

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