PUT IN WORK (6/10/2024)

Last week, the stock market capitalized on the previous week’s resilience to accrue some nice gains, so much so that multiple indices reached new all-time highs. The S&P 500 (SPY) and the Nasdaq (QQQ) reached untouched territory, with the former closing the week out up 1.4% and the latter closing up a whopping 2.7%.

Most of these gains were accrued on Wednesday when investors received new information pointing to a potentially slowing United States economy. Naturally, this led them to the conclusion that rate cuts are still on the menu for 2024. Said information pertained to private employment, stating that private employers added 150,000 jobs in May compared to the economist-anticipated 175,000. Several stocks then pushed higher, but the one leading the charge was Nvidia (NVDA), the stock climbing 5% higher on the news. This sudden jump resulted in their market cap briefly exceeding 3 trillion dollars. Thursday and Friday, however, are a different story.

What could have been an impressive but admittedly dangerous upward push in the stock market was halted by May’s jobs report, which was revealed on Friday. The seemingly fiery report claimed that the U.S. economy added 272,000 jobs in May compared to the 180,000 economists expected. Although this may seem poor on the surface, the reality is that these numbers might not be what they seem. Unemployment is another statistic that was looked at during the unveiling of the report, and it showed that the unemployment rate has risen to 4%, the highest it has been since January 2022. Interestingly enough, while the establishment job survey (the survey given to establishments to determine how many workers they have) showed a gain of 272,000 jobs in May, the household survey (the survey given to households to determine how many people under a single roof are employed) showed a loss of 408,000 jobs. Furthermore, those claiming full-time jobs dropped by 625,000, while those claiming part-time jobs rose by 286,000.

All of these factors, when combined, make the jobs report appear much hotter than it is. If all of this turns out to be the case, then it’s more than likely that the Fed will need to act. Though nobody can say for sure, rate cuts are still possible for 2024. Only time will tell.

(Nasdaq ETF (QQQ) price from June 2023 - 2024 — each candle is 1 week. Chart provided by tradingview.com.)

PORTFOLIO UPDATE

The majority of our portfolio ended flat on the week. While some stocks inched up, others inched down, resulting in a reasonably neutral week for us. Despite how well the market has been performing lately, there are still opportunities to take advantage of. That being said, keep an eye out for a purchase we’re making later today: Opera (OPRA). We plan to hold all currently owned stocks for the foreseeable future. As always, thank you for reading, and happy investing.