# “Markets will likely be most focused on labor supply and any prospects for cooling wage growth,” said Seema Shah, chief strategist at Principal Global Investors. “Today’s report doesn’t give much away. For the Fed, there is nothing in today’s report to suggest they can take their foot off the brake.”
# “The story here is the participation rate. It didn’t rise, it fell, which is counter to what the Fed is looking for in order to get the demand of labor up,” said Steve Chiavarone, portfolio manager and head of multi-asset solutions at Federated Hermes. “In addition, wage inflation remains elevated.”
# “No big surprises from today’s jobs report -- it largely confirms that the labor market remains tight, affording the Fed the flexibility to tackle its price stability mandate head-on,” Jason Pride, chief investment officer of private wealth at Glenmede.
# “The Fed likely won’t be swayed from its rate hike campaign,” said Mike Loewengart, managing director of investment strategy at E*Trade from Morgan Stanley. “Since numbers came in mostly in line with expectations, the market may have already priced in a robust jobs read.”
# The global market selloff that saw the S&P 500 post its worst first four months of a year since 1939 has further to run, according to Bank of America Corp. strategists led by Michael Hartnett. “Base case remains equity lows, yield highs yet to be reached,” they wrote in a note to clients.
# In the view of Ryan Belanger, founder of Claro Advisors, the central bank is “behind where they need to be on raising interest rates.” He said by phone Friday that “there’s a case to be made to rip the band-aid off and cool down this inflation.”
# Under Armour Inc slumped 23.8% after the sportswear maker forecast downbeat fiscal 2023 profit. Shares of rival Nike Inc also slipped.
# Coinbase Global Inc dropped 9% on Friday to the lowest level since the cryptocurrency exchange's 2021 stock market debut.
*During a discussion at the Carlson College School of Management on Friday, Minneapolis Federal Reserve President Neel Kashkari pushed back on views of many hawkish commentators that the Fed is way behind in the battle to control inflation. Kashkari said the Fed’s forward guidance has succeeded in pushing longer-term rates, adjusted for inflation, up close to a neutral level.*
Major U.S. stock-market indexes ended the week with small losses, which belies volatile action seen in recent days.
*A sharp drop in first-quarter U.S. productivity data and a rise in unit labor costs published Thursday were also cited as factors in the market’s drop that day, underlining stagflation fears. That rubs against the assertion by Powell and other senior Fed officials that they can achieve a so-called soft landing — lowering inflation without bringing economic growth to a grinding halt.*
*“What’s dangerous about yesterday’s huge market slump is that there must be an element of doubting the ability of there to be an effective ‘Fed Put’ in this cycle following a 30-40 year period where the central bank has almost always been able to come to the market’s rescue,” said a team of Deutsche Bank strategists led by Jim Reid.*
Heightened volatility will probably persist as the market is “trying to figure out where interest rates are going to settle,” according to Claro’s Belanger.
*Meanwhile, yields on 10- and 30-year Treasury bonds hovered at levels last seen in 2018, which they reached Thursday as stocks plunged.*
*The 10-year yield rose 5.8 basis points on Friday to 3.124%, the highest level since Nov. 13, 2018 based on 3 p.m. Eastern Time levels, according to Dow Jones Market Data. Rising rates are pressuring stocks.*
*Most traders are expecting a 75 basis-point hike at the U.S. central bank's June meeting, despite Fed chief Jerome Powell's ruling that out.*
*All eyes are on the monthly consumer price index inflation report on Wednesday, as investors seek clues to whether the economy is nearing a peak in inflation.*
By: via @AlliesFin Serve Stock Market
