Stock markets continued their historic rally to all-time highs last Friday. The Bureau of Labor Statistics posted employment increasing by 206,000. The unemployment was little changed at 4.1%. Despite the Federal Reserve repeating that it would wait for more data confirming disinflation, stock markets believe otherwise.
The U.S. economy added 70,000 government jobs. Health care added 64,000 and construction added 27,000 jobs. However, the BLS revised its April job count down by 57,000. May 2024 job counts fell by 54,000. Bond prices rose on the news.
Investors who bought the 20+ Year Treasury Bond ETF (TLT) or the iShares 7-10 Year T-bill profited. TLT stock traded as low as $90 last week to close at $92.56.
This week, the government will publish June its inflation report (consumer price index). Markets are certain that inflation will be above the Fed’s 2.0%. Even the Fed is expecting over 2.6%. Since inflation likely peaked at 5.4% in core inflation, interest rates will fall sometime in 2024.
Speculators bought the magnificent 7 and AI-related technology stocks last week. In that time, Apple (AAPL) gained 5.72%, Alphabet (GOOG) added 2.7%, Broadcom (AVGO) rose by 7.35%, and AMD (AMD) gained 7.79%. This contrasts with real-world economy stocks. Nike (NKE) lost 19.92% last week.
