Consumer price data was higher than expected, but not that high. After an initial premarket reaction, the major indices moved higher on the day while yields continued their drop and volatility moved out of the market.
The major indices bounced around today while investors await inflation data released by the Labor Department tomorrow. A dip in Treasury yields helped boost some large mega-caps and growth stocks, but stocks in the Nasdaq did not share the gains broadly.
The growth trade is continuing to build steam as investors await more inflation data later this week. The cautious start yesterday morning abated, and investors slowly rotated back into some growth and cyclical sectors today. Meme stocks continued crazy moves.
Growth investors seemed cautious in the first half of the session but turned bullish by the close. The caution showed up in the leading sectors after the market opened. As the morning ended, the action began rotating back toward growth.
The short week pivoted primarily on Friday’s unemployment data, a key signal for investors of how well the economy is recovering. The Nasdaq declined through the first three days but rallied back on Friday after the data was released. The caution for investors was apparent in the top sector list before and after Friday’s upside reversal.
Energy ( XLE ) and Real Estate ( XLRE ) led the sector list for the week, establishing their lead early in the week. Energy got a boost from the rise in oil prices on high demand. Real Estate is gathering momentum from rising housing and rental prices while also being a great hedge against inflation.
The market responded positively to jobs data released in the morning, sending indexes higher and boosting growth sectors. The unemployment rate dropped more than expected while non-farm payrolls May started to accelerate.
Mixed reactions to economic data moved investors into defensive mode on Thursday while they await more news on the labor market scheduled for Friday. Today’s data gave a boost to the US Dollar , but stoked fears of the fed tapering off monetary policy earlier than expected. The defensive sectors were up for the day while growth sectors took a step back from recent gains.
Another sideways move for the indexes while investors remained on the sidelines waiting for the economic data coming over the next two days. To pass the boredom, investors watched, or maybe even gambled with meme stocks that had another day of huge swings.
The Dow Jones Industrial Average attempted to set a record, but the small-cap Russell 2000 performed the best among the major indices today. As for the Nasdaq, the first day of the summer months started with a rally but faded quickly and continued last week’s sideways moves.