The U.S. has just released Non Farm Payrolls and Unemployment Rate reports for May.
Non Farm Payrolls report indicated that the U.S. economy added 559,000 jobs in May compared to analyst consensus of 650,000.
Yesterday, ADP Employment Change report showed that private businesses hired 978,000 workers in May. Non Farm Payrolls and ADP Employment Change reports often present conflicting signals, and we have just seen another example of this phenomenon.
S&P 500 futures gained upside momentum after the release of weaker-than-expected Non Farm Payrolls report. This is not surprising as weaker job market will force the Fed to maintain its support at current levels for many months, which is bullish for stocks.
Meanwhile, Unemployment Rate report indicated that Unemployment Rate declined from 6.1% in April to 5.8% in May, but it remains to be seen whether traders will pay any attention to this report as they remain focused on Non Farm Payrolls data.
Precious Metals Gain Ground As U.S. Dollar Declines After Weak Non Farm Payrolls Report
Precious metals like gold and silver were under significant pressure on Thursday after the release of the strong ADP Employment Change report. Today, gold and silver have a good chance to rebound as U.S. dollar moved lower after the release of the weak Non Farm Payrolls report.
This is bullish for gold mining stocks and silver mining stocks which suffered a sell-off during yesterday’s trading session.
If the U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, gets to the test of the support level at 90, precious metals will get additional support.
Treasury Yields Move Higher After Key Jobs Report
Interestingly, the yield of 10-year Treasuries moved above the 1.63% level and continues to gain ground after the release of Non Farm Payrolls report.
This move indicates that bond traders remain a bit worried about higher inflation in the upcoming months. It remains to be seen whether higher yields will put any pressure on tech stocks during today’s trading session as traders will likely remain focused on the the dovish Fed which is bullish for the whole market.