Jul 06, 2021
The global equity rally gained momentum last week on the combination of reduced inflation fears and robust labor data. Friday's non-farm payroll report came in at 850000 for 100,000 better-than-expected to post solid job gains for the month. Within that unemployment ticked higher but for a good reason, previously discouraged workers are returning to the labor force. What this means for the market is a clearer path for the FOMC. With inflationary pressures apparently subsiding, and labor markets still strong the Fed has little reason to act.
This week the biggest hurdle for the market will be the FOMC minutes. The minutes from the last meeting will be closely watched for any signs the Fed thinks inflation is getting out of control. The wrong wording within the statement could spook the market and send it into another tailspin.