Equities move higher
The S&P 500 and Dow Jones futures both moved higher on Friday supported by a good jobs report in the morning. Sideways trading led to a rally mid day, with some follow through in the afternoon. The S&P futures flirted with the 2400 level into the close, and the Dow pushed towards 20,960.
Strong jobs numbers
Non farm payroll came in at 211,000, a big improvement from the previous 98,000 which was revised to 79,000. Unemployment dropped to 4.4 %, the lowest level since May 2001. Tight labor conditions continue to exist, with the labor participation rate moving lower.
Good Signs
After a weak first quarter, the jobs data provides optimism for this quarter and beyond. The numbers also give market observers confidence that we will see the Fed take some action at the June meeting. If the trend continues, I will be looking for another rate hike at the September meeting, giving the Fed a total of three for the year.
With the equities closing higher for the week off the data, optimism remains high for the markets. Eyes will be focused on the Senate as they visit passage of a healthcare bill. Passage would be a plus for those hoping tax reform will be next on the agenda, another reason to be bullish.
John Weyer
Director Commercial Hedging
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