Before diving into today’s jobs report for May, it will be a useful exercise to recall the curveball that April’s report threw at investors.

One of the more hotly contested topics investors have been debating recently is what to make of the jobs report released one month ago, where the consensus expectation was for 1,000,000 new jobs and we only got 266,000 (since revised up to 278,000). On the one hand, data releases are volatile by nature and it is possible that the large miss could have been broadly dismissed as a “one off” among a package of otherwise very healthy economic data. On the other hand, it d

The U.S. economy is opening up and overall sentiment on Main Street is the strongest it’s been since our earliest analysis in 2005, according to LPL Research’s proprietary Beige Book Barometer (BBB). The result is based on our analysis of the Federal Reserve’s Beige Book, a publication released two weeks before each Fed policy meeting that captures qualitative observations made by community bankers and business owners—what we like to think of as “Main Street” rather than “Wall Street.” The BBB gauges Main Street’s sentiment by looking at how frequently key words and phrases appear in the t

Although there was some notable weakness in the middle of May, the S&P 500 Index was able to rally late in the month to finish with a modest gain. Incredibly, this was the eighth year out of the past nine that stocks gained during in May. Who said Sell in May?

As we noted a month ago, the worst six months of the year indeed are May through October, so we are still in the thick of a potentially challenging period based on seasonality. “After a nearly 90% rally off the lows, stocks could be ripe for a pullback, especially during the historically weak month of June,” explained LPL Financial Chief Market

After one of the worst starts to a year for fixed income, returns may not get much better from here. Long-term interest rates have traded sideways recently but we expect rates to potentially rise further, which would put downward pressure on bond prices. We’re not giving up on high-quality fixed income though, as Treasury securities have shown to be the best diversifier during times of equity market stresses. 

The Case For (Still) Higher Treasury Yields

Interest rates have moved off their very low levels to start the year, but we think they can go higher. Higher inflation expectations, less involvement in the bon