Weekly Highlights: June 5, 2017

Highlights of the week ended June 2, 2017 and a look ahead to this week’s expected announcements and potential market-moving activity.

U.S. equities finished positive for the week: The Dow Jones Industrial Average (DJIA) closed 126 points higher, or rose 0.60%, to 21,206. The Standard & Poor’s 500 (S&P 500) index gained 23 points, or rose 0.96%, to 2,439. The Nasdaq closed last week 1.54% lower at 6,306.
Mixed Economic Data: Last week, the U.S. Bureau of Labor Statistics reported total non-farm payrolls for the month of May rose by 138,000 jobs (vs consensus estimates of +185,000), with the unemployment rate falling modestly to 4.3%. The largest job gains were in healthcare and mining, with average hourly earnings for all employees on private non-farm payrolls rising by 4% to $26.22. Although the unemployment rate currently sits at a 16-year low and wages continue to rise modestly, U.S. consumer spending remains surprisingly low. Real U.S. personal spending is currently growing at 2.6% year over year, a level significantly below economists’ expectations of around 4%. Two explanations proffered include high levels of student debt and generally increased savings rate by American families since the financial crisis of 2008.

U.S. Month-over-Month Total Non-farm Employment (Last 2-years)
Source: U.S. Bureau of Labor Statistics, June 2017

Key reports/items for the upcoming week include factory orders data for April, ISM nonmanufacturing index for May, consumer credit for April, and China’s consumer price index and producer price index. The United Kingdom is also holding a general election on Thursday with the margin between Theresa May and Jeremy Corbyn narrowing recently.