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This morning, the final print of this latest Jobs Week has hit the tape: the Employment Situation report from the U.S. Bureau of Labor Statistics (BLS) for the month of June. Market participants can breathe a sigh of relief, as the headline number has come in at +147K — above the consensus estimate of +110K and the upwardly revised +144K for May. The Unemployment Rate fell to 4.1%, where we were back in February — an historically healthy number for the labor market.
Particularly after the -33K jobs lost reported in yesterday’s ADPADP private-sector payrolls, today’s stronger numbers put a cork in the narrative that the domestic labor market is unwinding. Especially at a 4.1% Unemployment Rate, it’s hard to argue there are any issues whatsoever in our current jobs data. Pre-markets moved higher on the news.
In fact, revisions to the previous two months have moved upward: May’s original print was +139K and April moved from the initial +147K to +158K in today’s revision, for total extra jobs gains over the past two months of +16K. The trailing 4-month average in jobs gains is +143K, more than enough to cover monthly retiree levels, even as it’s off the +199K in the previous 4 months.
However, on Wednesday’s ADP report we noticed a loss of -56K in Professional/Business Services in the private sector last month. We don’t see, in this morning’s BLS, a full breakdown by industry, and we see no gauge of Pro/Biz Services at all. The top industry for nonfarm payrolls in June was +73K, in Government hires (on the State & Local side; Federal Government jobs shed -7K).
In other words, only half the jobs gains from last month came from the private sector. Healthcare filled +39K positions last month, with Social Assistance +19K. Absent from this morning’s report are the usual sectors for monthly jobs gains, aside from Pro/Biz: Leisure & Hospitality and Trade/Transportation/Utilities. We might speculate these figures were moderately positive across the board.
We also might speculate that this morning’s report decreases the probability that the Fed will be reducing interest rates at its next FOMC meeting mid-July. This pushes the first potential cut out to September, as the Fed takes August off. Bond yields, in immediate reaction to today’s jobs report, jumped 13 basis points (bps) on both the 10-year and 2-year t-bill.
Weekly Jobless Claims Appear to Moderate
Initial Jobless Claims for last week dropped week over week, to 233K from an upwardly revised 237K the prior month. This is also down from expectations for 240K new claims a week ago, which again had been feared to jump higher on the “weak labor market” narrative that appears to have gotten ahead of itself.
Continuing Claims is where the real worry has been over the past couple of weeks, but in today’s print it also moderates: 1.964 million is roughly in-line with the downwardly revised 1.96 million the previous week. We haven’t (yet) struck 2 million weekly longer-term jobless claims, but then again, it’s only been 6 weeks since we notched above 1.9 million and stayed there. (Two million weekly continuing jobless claims would basically change the narrative of a robust labor market.)
U.S. Trade Balance In-Line, Well Off March Lows
For more good news — if we can stand it — the U.S. Trade Deficit for May was in-line with expectations at -$71.5 billion. Obviously, it’s hard to call a number like that “good news,” but it’s a vast improvement from the March read of -$138 billion, an all-time record low. The April revision was also improved, from -$61.6 billion reported last month to -$60.3 billion. Tariff issues have yet to shake out; we’ll get a better look at our trade situation over the next few months.
What to Expect from the Stock Market Today
We have a shortened session today, ahead of tomorrow’s Independence Day holiday: the closing bell rings at 1 pm ET. But between now and then, we’ll see new Factory Orders for May and the final print on Services PMI from S&P and ISM. Analysts expect Factory Orders to jump back up following a negative April, while Services PMI is anticipated to be mixed, with both metrics above the 50-level determining growth from loss.
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Investments in product suite and go-to-market are positives for the company. Also, rising cyber security indicates continued positive growth for CyberArk, going forward.
Assisted tax preparation sets HRB for long-term success. Spruce and AI Tax Assist draws a significant number of clients. Shareholder returns are supporting buoyant prices.
Cadence is well positioned for growth driven by strong demand, especially hardware and synergies from acquisitions with increasing prospects in IoT and AR/VR markets.
Solid loans, fee income, low-cost deposits, strategic buyouts, and relatively higher rates are likely to aid SouthState’s financials. Its solid liquidity enables sustainable capital distributions.
Decent loan demand, relatively high interest rates and efforts to grow fee income will likely aid BankUnited's top line. Given earnings strength, its capital distribution activities look sustainable.
Twilio's key initiatives, which include product innovation, global expansion and acquisitions, are helping it in gaining customers, which bodes well for long-term growth.
A heavy CRE loan concentration is expected to strain Valley National’s asset quality and high funding costs will exert pressure on NIM. Also, elevated expenses might hurt the bottom-line growth.
Softness in C&I, along with tariff troubles and global macro uncertainty, is expected to weigh on Generac’s topline. Costs, high debt and competitive pressures remain headwinds.
Uncertain geopolitical environment, leveraged balance sheet and customer concentration are negatives. Also, weakness in the industrial & IoT and communication infrastructure end markets are headwinds.
Bath & Body Works, Inc. (BBWI)Downgraded: 06/28/25
There are growing concerns about high costs. General, administrative and store operating expenses increased 4.3% year over year to $437 million in the fiscal first quarter.
Softness across industrial and consumer electronics end markets, rising costs, intensifying competition and leveraged balance sheets are key headwinds.
The weakness in demand for industrial cylinders as customers continue to work their inventories will weigh on Specialty Products segment. Escalated input costs and tariffs will also impact results.
The impressive Disney+ user growth rate driven by expanding international footprint and solid content portfolio should be the key performance driver for Disney.
Innovative Medicine unit is showing a growth trend, driven by existing products like Darzalex, Tremfya and Erleada and continued uptake of new launches, including Spravato, Carvykti and Tecvayli.