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Markets Volatile After Big Jobs Numbers, Small Caps Rock


Today's financial recap and tomorrow's financial outlook.

Markets had a volatile day as a major piece of economic data hit.

The BLS releasd the May NFP numbers, with most of the data beating expectations.

280,000 nonfarm payrolls were created, easily beating the 226,000 consensus. March and April's numbers were also revised higher.

Average hourly earnings also beat expectations, though the unemployment rate was above consensus at 5.5% due to an expansion of the labor force.

The beat drove sharp increases in the US dollar and Treasury yields as strong data could be supportive of Fed interest rate hikes.

The FOMC's Dudley spoke in Minneapolis today.  As other Fed officials have said, the Fed will likely raise rates this year, though the pace afte the first increase will be very gradual. He also noted that the Q2 rebound has been fairly muted.

The major indices ticked lower at the open but picked up some steam to finish mixed.. The S&P 500 and DJIA weren't able to maintain their rallies and closed down -0.2% and -0.3%, respectively. The NASDAQ rallied 0.2% supported by strength in cybersecurity and biotech.

The Russell 2000 outperformed all major indices, finishing up 0.8%.

Oil prices rose after the Baker Hughes US Rig count fell for the 26th consecutive week. Oil had opened lower this morning after OPEC announced that they had no plans to lower production.

Transports managed to finish up again today, despite the rise in oil prices.

The cybersecurity sector rallied following a hacking incident at the US Office of Personnel Management. The ISE Cyber Security ETF (HACK) surged 3.4%.

Biotech ETFs performed strongly as well. The S&P Biotech ETF (XBI) rallied 1.7%, while the NASDAQ Biotechnology ETF (IBB) gained 1.2%

The utilities sector took a big hit today due to the strong dollar. Consumer staples stocks were also weak.

Cardinal Health (CAH) announced that it will buy Harvard Drug Group from Court Square Capital Partners for $1.15 billion. The acquisition is expected to aid Cardinal in enhancing its generic pharmaceutical distribution business and expand existing telesales programs and capabilities.

European markets closed down as Greek failed to make its scheduled IMF payment. Greece plans on rolling its June payments into one lump sum which will supposedly be paid at the end of the month. European equities were weak today.

In Asia, the Shanghai Composite rallied 1.54%. Japan's Nikkei fell 0.13%, and Hong Kong's Hang Seng Index tumbled 1.06%.

Monday's Financial Outlook

The US May Labor Market Conditions Index is the only domestic report on the calendar.

Overseas economic data reports on Sunday will include Japan's Trade Balance and GDP, and China's Trade Balance. Monday will feature Japan's Eco Watchers, German Industrial Production and Trade Balance, Euro-Zone Sentix Investors Confidence, Canadian Housing Starts, China's CPI, and Australian Home Loans.

Sears Holdings (SHLD) will announce its earnings before the open. After the close will feature earnings from Casey's General (CASY), H&R Block (HRB), and United Natural Foods (UNFI).
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