Non-farm payrolls data exceeded expectations, but U.S. stocks didn't fall much?
Non-farm payrolls data: The number of new non-farm payrolls in the United States in May released on June 7 was 272,000, exceeding the market expectation of 180,000. Average hourly wages increased by 4.1% year-on-year and 0.4% month-on-month, both stronger than expected.
Market reaction: After the data was released, U.S. bond prices plunged, and metal prices such as gold and copper fell below key points. Spot gold recorded the largest daily decline in more than two years. U.S. stocks fluctuated more, but closed only slightly lower. The Nasdaq 100 Index and the S&P 500 Index both closed down 0.11%.
Reason analysis: Strong employment data: shows that the U.S. economy is resilient, indicating that there will be no hard landing in a high-interest rate environment, which is not bad news for U.S. stocks.
Expectations of interest rate cuts were frustrated: The strong non-farm data hit the market's expectations of interest rate cuts, leading to greater market volatility. Concerns about maintaining high interest rates for a long time still exist.
Corporate earnings resilience: The just-concluded earnings season showed that corporate earnings, especially those of technology giants, performed well, providing some support for U.S. stocks.
Earnings report window period: The next period will be an earnings report window period, and the market may still trade on the expectation of interest rate cuts.
Limited short-term upside: Due to the setback in interest rate cut expectations, the upside of US stocks in the short term may be limited.
Fluctuation in interest rate cut expectations: Factors that cause fluctuations in interest rate cut expectations are not necessarily bad news for US stocks.
Summary:
Although the non-farm payrolls data exceeded expectations and hit the expectation of interest rate cuts, US stocks did not fall sharply, showing the market's confidence in the resilience of the US economy. However, the fluctuation of interest rate cut expectations and concerns about high interest rates will still affect the short-term trend of the market.
