The Profit Margin: June 5, 2023
Statistic of the Week
Now that the debt ceiling deal is in place, student-loan borrowers must resume making payments in three months. The deal ends the three-year freeze on payments, interest, and collections. For those that have not been making payments, now is a good time to find your loans, begin budgeting for payments to resume, and examine the full range of payment options.
Slow growth in China is causing a decline in exports across the region. In April, Hong Kong’s exports to mainland China were down 13% year over year. Exports from South Korea also declined. In May, they were down by about 15%.
Market Moving Events
Monday: ISM Services Index, Factory Orders
Wednesday: Trade Deficit, Consumer Credit
Thursday: Jobless Claims, Wholesale Inventories
With the resolution of the debate around the debt ceiling, goldilocks jobs figures, and abounding excitement around artificial intelligence, U.S. stocks put in solid gains last week. All three major domestic equity averages finished in the black. The Nasdaq was once again the weekly leader, rallying 2.04%.1 It is up to a 13-month high.2 The DJIA was able to move out of the red on a year-to-date basis with a weekly move of 2.02%.3 And with broad participation, the S&P 500 notched a gain of 1.83%.4 Yields fell on the week. The 10-year Treasury finished Friday with a yield of 3.69%, down 0.13% from the week prior.5
Last week’s employment figures had something for everyone. Nonfarm payrolls (chart right) surged past analyst estimates with close to 340,000 jobs added.6 Simultaneously, hours worked per week dipped 0.1%, the unemployment rate rose to 3.7% (a seven-month high), and wage growth eased to a rate of 4.3%.7 Combined, they depict a softening, but not collapsing, labor market. As a result, the odds of a rate hike this month from the Federal Reserve fell.8 The week ahead is light on economic data. Monday’s ISM Services Index release will be watched to better determine how that critical portion of the economy is performing. The manufacturing side of the economy is clearly in contraction. Services play a larger role in the overall U.S. economy than manufacturing – the quality of the figure should provide insight into the strength of the consumer.
Chart of the Week
Market Moving Events:
Chart of the Week:
Clearnomics, Bureau of Labor Statics, Reuter’s
Statistic of the Week:
2.Bloomberg, Investor’s Business Daily
6.Bureau of Labor Statics, Reuter’s
7. Investor’s Business Daily
8. Investor’s Business Daily