Weekly Market Insights: Labor Numbers Positive

A strong, but not too strong, employment report sparked a rally on the final day of trading, propelling stocks to a modest gain for the week.

The Dow Jones Industrial Average climbed by 0.66%, while the Standard & Poor’s 500 added 0.61%. The Nasdaq Composite index increased by 0.48%. The MSCI EAFE index, which tracks developed overseas stock markets, edged up 0.10%.^1,2,3

Rotation Continues

Markets have traded sideways since mid-April, though beneath the surface has been ongoing sector rotation. Last week continued that trend.

While stocks ended on a strong note, the performance of industry sectors varied widely. Energy, real estate, utilities, and a number of reopening stocks performed well, while consumer discretionary, communication services, healthcare, and technology stocks lagged.

The Fed announced on Wednesday that it will soon begin selling the corporate bonds and exchange-traded funds it had accumulated during the pandemic, an action that some observers interpreted as a harbinger of an approaching change in its easy-money policies. But the below-consensus May job figure on Friday buoyed investors who believe the Fed will not change course soon.^4,5

Labor Market Recovery

It was a good week for the labor market. Initial jobless claims fell to pre-pandemic levels (385,000), ADP (Automated Data Processing) reported a big jump in private-sector hiring (978,000), and the monthly employment report saw nonfarm payrolls increase by 559,000 in May – a healthy increase even though it fell short of some expectations. The unemployment rate declined to 5.8% from April’s 6.1% level.^5,6,7

Friday’s report showed that total employment numbers still remain about seven million jobs below their pre-pandemic levels. It also showed an acceleration in wage gains, which rose 2% year-over-year following the 0.4% gain in April.⁸

This Week: Key Economic Data

Tuesday: Job Openings and Labor Turnover Survey (JOLTS).

Thursday: Consumer Price Index (CPI). Jobless Claims.

Friday: Consumer Sentiment.

^{Source: Econoday, June 4, 2021
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.}

This Week: Companies Reporting Earnings

Monday: Marvell Technology, Inc. (MRVL), Coupa Software (COUP).

Wednesday: Campbell Soup Company (CPB), Brown-Forman Corporation (BF.B).

Thursday: Chewy (CHWY).

^{Source: Zacks, June 4, 2021
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.}

“When the whole world is silent, even one voice becomes powerful.”

– Malala Yousafzai

Are You Prepared for a Natural Disaster?

Natural disasters such as hurricanes, earthquakes, or fires can happen at any time which is why it's important to be prepared before disaster strikes. Here are a few tips to help you prepare in case anything happens:

• Update your family's emergency plans: Updating your emergency plans can include knowing where to go, where all important documents and possessions are located, and what you need to be prepared for. Check up on the emergency plans for your home or business frequently because things can change.
  
  
• Create digital copies of important documents: Most financial organizations like banks and insurance companies provide digital copies of bank statements, tax returns, and insurance policies anyway, and having all these digital copies saved and organized is a good practice to get into. If you only have paper copies of important documents, scan them and save them to your computer in case you can't access them in an emergency.
  
  
• Document valuables: It's a good idea to document valuables to make it easier to claim insurance and tax benefits after a natural disaster. A disaster loss workbook will help you compile a list of belongings and photographs that can make this process even easier for both the IRS and your insurance provider.

The best time to prepare for an emergency is always when you don't need to, not after the fact. These tips will help you have everything you need ready in the case of a natural disaster or other emergencies.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁹

Picking Up a Creative Hobby is About More Than Passing the Time

Creative hobbies like writing, knitting, making clothes, and many more are about more than just passing time. In fact, creative hobbies and side projects can make you happier, healthier, and more productive.

When considering a side project or hobby, experts suggest picking something up that's low-risk, low-pressure and a labor of love. The difference between a creative hobby and a creative project is that creative hobbies are ongoing and don't have a dedicated end goal. Side projects are projects that have a goal at the end of the tunnel. For example, your creative hobby could be writing, and your side project could be writing a book.

Coming up with a project or hobby can provide a big psychological lift and a boost to work productivity. Find something that’s low-risk, low-pressure, and a labor of love, and you've found your project.

Tip adapted from Fast Company¹⁰

I have cities, but no houses. I have mountains, but no trees. I have water, but no fish. What am I?

Last week’s riddle: What is placed on a table and cut, but never eaten? Answer: A deck of cards.

Arches National Park, Utah.

Footnotes and Sources

^{1. The Wall Street Journal, June 4, 2021}

^{2. The Wall Street Journal, June 4, 2021}

^{3. The Wall Street Journal, June 4, 2021}

^{4. The Wall Street Journal, June 2, 2021}

^{5. CNBC, June 3, 2021}

^{6. CNBC, June 3, 2021}

^{7. CNBC, June 4, 2021}

^{8. CNBC, June 4, 2021}

^{9. IRS.gov, September 23, 2020}

^{10. Fastcompany.com, July 17, 2019}

^{Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.}

^{The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.}

^{The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.}

^{The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.}

^{U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.}

^{International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.}

^{Please consult your financial professional for additional information.}

^{This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.}

^{Copyright 2021 FMG Suite.}