Stocks closed higher on Friday and for the week, making it the 2nd up week in a row (and 3rd up week out of 4), for all of the major indexes.

Friday's better-than-expected Employment Situation Report capped off a positive week.

The Bureau of Labor Statistics (BLS) showed nonfarm payrolls for May came in at 139,000 (140K private sector and -1,000 public), vs. the consensus for 129,000 (120K private and 9K public), with the unemployment rate holding steady at 4.2%. Average hourly earnings were up 0.4% m/m vs. last month's 0.2% and views for 0.3%. The y/y rate came in at 3.9% vs. last month's 3.9% and estimates for 3.7%.

Revisions to prior months had March being reduced by -65,000 to 120K (from 185K), while April was reduced by -30,000 to 147K (from 177K).

The biggest job gains last month came from the following industries: Health Care gained 62,000 new jobs; Leisure & Hospitality added 48,000 jobs; and Social Assistance employment was up 16,000.

The stronger jobs report continued to underscore the strength and resilience of the economy.

The market was already riding higher last week on better-than-expected inflation reports from previous weeks, and news that President Trump and China's President Xi spoke on Thursday, which "resulted in a very positive conclusion for both Countries."

Trade talks will continue with both leaders confirming plans to visit each other in their respective countries.

The Administration is also expected to announce trade deals with several other countries in the coming weeks.

In other news, we heard that the European Central Bank (ECB) cut interest rates yet again last week by another 25 basis points, bringing rates down to 2%. It comes, in part, as a result of continued progress on inflation, which fell to 1.9% in May.

In general, the Fed and the ECB usually see their monetary policy move in the same direction. Not always, but usually. The ECB has cut rates by 175 basis points since the middle of last year, going from 3.75% down to 2.0%. The Fed, however, has only lowered rates by 100 basis points, going from a midpoint of 5.38% in 2024 to 4.38%, which has been on hold since the new year began.

The expectation is for the Fed to begin cutting rates again by 25 basis points at their September 17^th meeting. The Fed has stated they still see two rate cuts this year.

Momentum for the market is to the upside with the big three indexes within striking distance of their all-time highs. The Dow is 5.00% away from their all-time high, with the S&P 500 just 2.34% away, and the Nasdaq 3.19% away.

Friendly economic or trade news, or just the lack of any negative news surprises could see the indexes challenge, if not breakout to the upside in the very near offing.

So make sure you're taking full advantage of it.

See you tomorrow,