Wall Street started June with gains

Wall Street closed the first week of June with gains. 

Macroeconomic data anticipate a slower than expected recovery in the United States and uncertainty regarding Federal Reserve policy.

The Dow Jones accumulated an advance of 0.7%. The selective S&P 500 gained 0.6% and was very close to its last record. Meanwhile, the Nasdaq index increased by 0.5%.

Last Monday was the Memorial Day holiday in the US, so it has been a four-day week characterized by choppy trading. 

The Fed announced plans to sell corporate bonds

The Fed stated in its Beige Book that the economy expanded at a moderate rate from early April to late May. It resulted from vaccines and lockdown relaxation measures, despite supply chain disruptions. 

Meanwhile, the Federal Reserve has announced plans to sell corporate bonds and index funds it obtained in 2020. Many investors have interpreted it as a sign of change, despite its reduced value.

There were expectations for the employment report published this Friday. It revealed a total of 559,000 jobs and a decrease in the unemployment rate to 5.8%. Despite these weak figures, they encouraged the market, which was worried about monetary policy.

Wells Fargo analysts stated that the last two months of disappointing job increases illustrate the recovery in jobs is likely to last longer than previously reported. 

Experts estimated that the full recovery of employment in the US might not occur until late 2022 or early 2023. It’s because there are still 7.6 million fewer jobs than before the pandemic broke out.

They added that the moderation in hiring would make the Fed have to wait longer to see substantial progress in the labor market. Still, the pressures on wages suggest that the Fed may have to broaden its definition of progress.

In the debt market, the 10-year Treasury yield started the week at 1.64% but fell sharply in reaction to the employment report, to 1.56%, which boosted the technology sector.