The S&P 500 Index (SP500) on Friday 1.82% more for the holiday shortening week closed at 4,282.37 points, up two out of four sessions. SPDR S&P 500 Trust ETF Its accompanying (NYSEARCA:spy) 1.88% increase in Week.
The benchmark index’s gain is the third in a row during the green week, this is the first time it has achieved such an achievement since March. Most of the gains came today and on Thursday.
The resolution of the week’s debt ceiling story allows investors to turn their attention back to economic data and what it means for the Federal Reserve’s future monetary policy actions. .
US President Joe Biden and Speaker of the House Kevin McCarthy last weekend iron introduced a proposed 99-page bill to suspend the debt ceiling by 2025. The bill was erase by the House Rules Committee on Tuesday for a full vote, then easily pass on Wednesday. Senate erase legislation on Friday, with Biden now expected to sign it into law.
Focus shifts to the state of the labor market after investors get some data points for the week.
The first is April JOLTS . report, indicating a spike in job opportunities. Next is the Ministry of Labor final estimate Quarterly productivity and cost estimates show a decrease in off-farm productivity and a substantial adjustment in unit labor costs.
Weekly Unemployment Claims Got into was lower than expected, while the ADP measure of private payroll shows Strong job growth in May. Finally, traders analyzed the nonfarm payrolls report, which showed headline numbers soaring along with rising unemployment.
The overall picture painted by the data is a contradictory one, showing that the US labor market continues to remain highly resilient, although some cracks have been exposed.
Taking their cue from strong jobs data, market participants this week initially set out their expectations for another 25 basis point rate hike by the Fed at the policy committee meeting. currency at the end of this month. However, the central bank’s speakers made comments that led to a complete revision of the Fed’s futures.
Philadelphia Fed President Patrick Harker at a side chat on Wednesday speak that the central bank should skip a rate hike at its June meeting as monetary policy is mostly constrained. He followed up on those comments on Thursday by speak that the Fed is nearing a point where it can keep the federal funds rate steady.
Meanwhile, Fed Governor Philip Jefferson on Wednesday signaled that skipping a rate hike would allow the central bank to assess the data. Fed President St. Louis James Bullard in an essay on Thursday speak that the federal funds rate is “at a more appropriate level than it was a year ago.”
The dovish nature of Fedspeak has led to a significant recalibration of Fed futures contracts. According to the CME FedWatch tool, markets are currently pricing in a close to 75% chance the Fed won’t raise rates at its June meeting, followed by a ~54% probability of a 25 basis point increase in July.
Another notable development of the week is NVIDIA (NVDA) become First chip maker to join the $1T market cap club. The stock was largely supported by investor excitement around artificial intelligence (AI), coupled with a blockbuster earnings report. Enthusiasm around AI lose breath when the week ends, partly because overwhelming guide from software vendor C3.ai (artificial intelligence).
Moving on to the weekly performance of the S&P 500 (SP500), all 11 sectors ended in the green, led by a huge gain of +3% in the Consumer Consumables and Real Estate sectors. Technology took a short break after the recent strong rally, although the sector still posted gains of more than 1%. See the breakdown below for the weekly performance of the sectors as well as their associated SPDR Select Sector ETFs from May 26 close to June 2:
#1: Consumer discretion +3.27%and the Consumer Discretionary Sector SPDR ETF (XLY) +3.31%.
#2: Real Estate +3.17%and the SPDR Sector Select Real Estate ETF (XRE) +3.11%.
#3: Materials +2.87%and SPDR Sector Selective Materials ETF (XLB) +3.06%.
#4: Industry +2.57%and the Industrial Options SPDR ETF (XLI) +2.64%.
#5: Take care of your health +2.19%and the Healthcare Sector SPDR ETF (XLV) +2.19%.
#6: Finance +2.12%and the financial options industry SPDR ETF (XLF) +2.15%.
#7: Information Technology +1.37%and SPDR Sector Selective Technology ETF (XLK) +1.29%.
#8: Energy +1.31%and SPDR sector select energy ETF (XLE) +1.43%.
#9: Communication Service +1.12%and the SPDR Sector Select Communications Services Fund (XLC) +1.61%.
#10: Utilities +0.79%and the SPDR Utilities Sector Selection ETF (XLU) +0.82%.
#11: Consumer staples +0.28%and the Consumer Staples Select Sector SPDR ETF (XLP) +0.25%.
Here’s a chart of the year-to-date performance of 11 sectors and how they stack up against the S&P 500. For investors looking to the future of what’s happening, take a look. Search Alpha Catalyst Watch for a breakdown of next week’s actionable highlights.