The Bureau of Labor Statistics said nonfarm payrolls rose by 217,000 in May, which was slightly ahead of the 215,000 consensus. It was the fourth straight month with a 200,000+ increase, the longest such streak since 2000.
Unemployment fell to a 6-year low at 6.3%, while hourly earnings rose 2.1% year-over-year, slightly exceeding expectations for a 2.0% gain.
In reaction, the S&P 500 (INDEXSP:.INX) rallied and finished at an all-time high of 1,949.44, up 0.5%.
The VIX (INDEXCBOE:VIX) fell 8.1% to 10.73, a level not seen since early 2007.
Related volatility indicators, like the CBOE Short-Term Volatility Index (INDEXCBOE:VXST) and the CBOE NASDAQ-100 Volatility Index (INDEXCBOE:VXN), also declined.
Conventional wisdom assumes that extremely low VIX levels means investors are very complacent. This is bearish from a sentiment standpoint, meaning stocks could fall and the VIX could rise.
However, the reality is not so simple, since 10-day realized volatility in the S&P 500 is just 4.1%.
Since the VIX, which measures implied volatility in S&P 500 index options, is trading at a premium to realized volatility, investors may not be as complacent as the VIX would otherwise suggest.
In a surprise move, Mexico's Central Bank cut its main policy rate by 50 basis points, to 3.0%, to combat weak economic trends. Both Bloomberg and Reuters reported that zero economists in their respective surveys expected this move.
Taking a deeper look at stocks, the small-cap Russell 2000 (INDEXRUSSELL:RUT) rose an impressive 1.0%, indicating improved optimism for the US economy.
Emerging markets also fared well, with Brazil, Russia and India, leading the charge, though China was weak.
European stocks also performed well, spurred on by the ECB's aggressive monetary policy announcement from Thursday.
GW Pharmaceuticals (NASDAQ:GWPH) surged 6.2% after the FDA granted Fast Track designation to its Epidiolex drug, which treats a rare form of epilepsy.
And finally, shares of Apple (NASDAQ:AAPL) were down fractionally ahead of its 7:1 split, which went into effect after the close.
Monday's Financial Outlook
There are no major economic reports scheduled for Monday. Hertz Global (NYSE:HTZ) is the only major name reporting earnings.
Overseas, over the weekend and into Monday, we'll see China's Trade Balance numbers, and Japan's Q1 GDP and May consumer confidence reports.
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