Market Brief – Friday 6/5/20

Stocks and Treasury yields headed higher after a bizarre Nonfarm payroll report showed employers added jobs when most of the country was shut down. The BLS admitted to a “survey error” and changes in its reporting measures. While yields appeared to be peaking in early trading, stock investors continued to throw money at the second-most overvalued stock market in history, relative to the size of the market compared to the economy.

The BLS reported an incredible +2.5 million jobs against expectations of a -7.5 million decline. April and May’s payrolls were revised lower by -642k jobs. Average hourly earnings slowed to +6.7% from this time last year and the average workweek increased to 34.7 hours in May.

The New York Fed announced they will taper their purchase of U.S. Treasury securities to $4 billion per day starting next week.

Stocks finished the day higher as investors who once believed Americans losing the jobs was bullish, now believe Americans going back to work is bullish. Treasury yields closed out the week higher but faded their early morning drubbing as buyers stepped into the bond market to buy Treasuries.