U.S. market indexes were higher on Monday with stable volatility after losses Friday from a much lower than expected jobs report. The Dow Jones Industrial Average closed for the day at 17,920.33 for a gain of 113.27 points or 0.64%. Boeing (BA, Financial) led gains for the Dow Jones Industrial Average on Monday with a price increase of 3.55% for the day. The Standard & Poor's 500 Index was also higher at 2,109.41 for a gain of 10.28 points or 0.49%. The Nasdaq Composite also gained closing at 4,968.71 for a gain of 26.20 points or 0.53%. The VIX Volatility Index was up just slightly at 13.62 for a gain of 0.15 points.
On Friday the Bureau of Labor Statistics released its May Employment Situation report. The report showed an increase in payrolls of 38,000 and the unemployment rate decreasing to 4.7%. The 38,000 payrolls added for the month of May was far below the expected consensus of 158,000.
While a decrease in the unemployment rate to 4.7% was a positive indicator, Monday’s Labor Market Conditions Index showed that there are still challenges in the labor market that the Federal Reserve will likely want to consider. The Labor Market Conditions Index was down -4.8 for its fifth monthly consecutive decrease. The Labor Market Conditions Index is a closely followed labor market indicator for the Fed and its continued weakening does signal that June is not likely the best time for the next rate increase.
In a speech from Janet Yellen on Monday afternoon, the Fed leader continued to report the Federal Open Market Committee’s commitment to increasing rates gradually over the next year. The Fed’s projections also show the committee’s intentions for future rate increases in the near-term. However, Yellen’s speech gave no indication of the exact timing of the next rate increase. The market appears to be factoring in a rate increase later in the year and the Fed leader’s speech was consistent with that market sentiment which helped stocks trade mostly higher for the day.
In a report Monday, CNBC gave highlights from Yellen’s Monday afternoon speech.
