URA - Weak Non-Farm Payrolls In May Can Pull Rate Cuts Forward

2024-06-06 08:35:51 ET

Summary

• Considering the Fed's close watch on labor market figures, the May figures will be key as they may well confirm that a slowdown is indeed underway.
• After a weak April, the employment situation is forecast to be sluggish again. This ties in with muted economic trends seen in GDP, corporate profits and even other labor surveys.
• Along with the likely start of a rate cut cycle for other central banks, this can pull the Fed's rate cuts forward too.
• A weaker economy and lower interest rates suggest plenty of ideas on what to buy and what not to right now. For the short term, the broad indexes look avoidable, while geopolitically driven stocks are worth considering.

From a purely analytical perspective, the unfolding of macroeconomic trends in the US economy has been fascinating in recent times. The Fed has held rates steady, but the economy was surprisingly resilient, as seen in both the labor market and GDP growth figures....

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