Market Update

Fortunately, it was a shortened trading week, and equity markets appeared somewhat directionless as all attention was fixed on today's (Friday, June 4, 2021) release of US employment data.
As we reported on May 7, 2021, April's US employment figures were a significant disappointment, with employment growth at just 266,000 jobs compared to economists' expectations of a 1 million gain. Despite economists downplaying this as an anomaly due to strong readings in other economic data, they anticipated a robust May report with a gain of 674,000 jobs.
The actual May report showed an increase of 559,000 jobs. While this falls below consensus estimates, we don't view it as a negative outcome. Instead, it suggests that employment growth is on an upward trajectory.
As we discussed last month, this "negative news" is actually positive because it may help alleviate recent market concerns about runaway inflation. This data further reinforces our belief that current inflationary pressures will likely be transitory, and as such, central banks like the Fed, BoE, ECB, and BoJ will maintain accommodative monetary policies by keeping interest rates low.
Consequently, barring the typical everyday risks like escalating geopolitical tensions with China or Iran or the emergence of a new coronavirus variant, we find it challenging to identify reasons why global equity markets can't continue to advance in the coming months.
Turning our attention to the week ahead, we will be monitoring UK industrial and manufacturing data, as well as April's GDP figures. Additionally, we'll be looking out for US and Chinese CPI inflation readings, the University of Michigan Consumer Expectations Index, Chinese trade data, and an ECB monetary policy meeting.