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 It was jobs day in America, and America crushed expectations. First, the scoreboard: - Dow: 15,135.8, +147.2, +0.9%
- S&P 500: 1,631.8, +16.4, +1.0%
- NASDAQ: 3,479.3, +35.7, +1.0%
And now, the top stories: - The June jobs report offered tons of great news. We learned that U.S. companies added 195,000 new payrolls in June, which was much stronger than the 165,000 expected by economists. This was driven by private payroll, which jumped by 202,000, well ahead of the expectation for 175,000. The unemployment rate was unchanged at 7.6%
- In addition to the great headline numbers, the underlying details were also quite strong. The prior months' number were revised upward, the size of the labor force grew, average weekly hours rose, wages climbed, construction payrolls jumped despite surging mortgage rates, and retail payrolls expanding confirming strength on main street. The State Of American Jobs In 22 Charts »
- UBS's Drew Matus noticed a dynamic that could be a precursor to some inflation: "It's interesting, though, that average hourly earnings growth has actually accelerated even as hiring has shifted toward lower-wage industries and implies perhaps a bit more wage pressure and a bit less slack in the labor market than the Fed is anticipating."
- "In light of the better-than-expected labor market data over the past few months, we are bringing forward our call for the Fed tapering QE purchases from the December FOMC meeting to the September meeting," said Goldman's Jan Hatzius. "We expect that purchases may be reduced from the current rate of $85bn per month to $65bn per month, with most or all of the adjustment occurring through reduced Treasury purchases."
- Greater expectations for a tapering, or gradual reduction, of the Fed's bond buying plan probably contributed to the huge bond market sell-off. The 10-year U.S. Treasury note yield surged to as high as 2.7% for the first time since August 2011.
- Not everyone in the stock market were winners. Homebuilder stocks got demolished, perhaps on fears that higher Treasury rates would mean higher mortgage rates, which could in turn put pressure on the housing market.
- Gold prices tumbled by 3%, obliterating the gold mining stocks with it.
- Don't Miss: GOLDMAN: Here Are The 10 Most Overpriced Stocks In The Market »
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