Weekly Market Review June 7, 2023

The U.S. labor market continued to deliver strong results, adding 339,000 jobs in May combined with an additional 100,000 jobs in revisions to the prior two months. Despite the strong results, the unemployment rate ticked up to 3.7% from a year earlier, an increase from April’s 3.4%. The increase reflects more people entering the labor force while fewer unemployed people find jobs. Further, the labor market is beginning to show signs of moderating, including a decline in job openings, fewer people quitting their jobs and slowing wage growth. Equity markets rallied on the top-line job growth, with the Dow jumping 2.1% on Friday, its best single-day return since January. (Source: The Wall Street Journal)

Home prices rose for the second straight month despite an average 30-year mortgage rate of 6.57% for the week ending May 25th. The modest increase was a result of low housing inventory levels which is partially driven by a behavioral shift from existing homeowners with favorable mortgage rates who are reluctant to sell. Despite the uptick in home prices, the real estate market is still slumping overall, with April year-over-year sales down 23.2% and median existing home prices falling 1.7%, the largest year-over-year price decline since January 2012. (Source: The Wall Street Journal)

The debt ceiling deal passed through the Senate on Thursday, officially avoiding a government shutdown and a potential default scenario. The upcoming presidential election cycle now shifts into focus, with an already crowded Republican field including former president Donald Trump and Florida Governor Ron DeSantis.

Blueprint Numbers

EMPTY OFFICE SPACE - The return to the office has stalled at approximately 50% of pre-pandemic levels, putting pressure on the largest office landlords. Since the start of 2020, shares of office REITs have declined 48% while the broader REIT index is flat. (Source: The Wall Street Journal)

EMPLOYMENT STREAK - May's 3.7% unemployment rate marks the 16th consecutive month below 4%, the longest such streak since the 27-months between 1967 and 1970 and the fourth-longest period below 4% in the post-war era. (Source: Edward Jones)

HUMAN OR AI? - In the largest ever "Turing Test", over 1.5 million people were tested to see if they could differentiate between chatting with another human or an AI chatbot; 32% of humans could not tell they were interacting to AI. (Source: Forbes)

BASEBALL'S HISTORICALLY BAD TEAM - The Oakland Athletics have lost 48 of their first 60 games, the third worst record through the first 60 games of an MLB season in history. At this pace, the team would eclipse 120 losses, the record for most losses set in a single season set by the New York Mets in 1962. (Source: ESPN)