Friday morning stock market participants will watch the May jobs report. With the major indices at all-time highs, markets are pricing in the economy adding fewer jobs. Already, the 30-year, 2-Year, and 10-U.S. Year Treasury Bond yields are below 5.0%. This suggests that interest rates will fall within the next few months and as late as early next year.
On Wednesday, ADP data showed that the median year-over-year pay increase for people switching jobs fell to 7.8%. Lower job turnover helps companies by stabilizing the workforce and minimizing training-related costs.
Some companies are already rallying higher on expectations that interest rates will fall, re-igniting the economy.
Beverage firm Coca-Cola (KO) trades at near a 52-week high. Pepsi (PEP) is bouncing back from session lows, rising from $170 to $173.20. McDonald’s (MCD) and Starbucks (SBUX) are forming a v-shaped rebound.
In the AI sector, bearish investors placed a definitive bet against Nvidia (NVDA). The outstanding short bet is around $34 billion, according to an S3 Partners report. That accounts for 1% of Nvidia’s stock market value. Bears hold an $18 billion bet against Tesla (TSLA) and a $19 billion bet against Apple (AAPL).
Short-sellers are likely hedging their long positions, which would protect them from bigger losses if the technology sector falls.
