NFP Numbers Miss, Yet Equities Higher, And What We Got Right About ETFs

As the NFP jobs number missed expectations of 645K-665K, with a print of only 559K, the equity indices jumped higher. What gives?

This lower print could be a prelude to the next Fed meeting, which happens on June 15-16. Weak job growth could give the Federal Reserve a reason to continue with the "lower for longer" theme and more dovish signals. The Ten-Year note yield moved lower on Friday off the jobs data, while the Nasdaq surged. Tech has been moving inversely to bond yields at a decent correlation in recent months and could be a sign of things to come.

Figure 1 - $TNX 10-Year Note Yield (candlesticks) compared to $NDX Nasdaq 100 Index (sold red line) -March 23, 2021, - June 4, 2021, Source

Above, we can see the mostly negative correlation between the TNX 10-Year Note yield (candlesticks) and the NDX Nasdaq 100 Index (red line).

The Nasdaq 100 led all indices on Friday, tacking on 1.78%, while the 10-Year Note yield lost 4.00%, to settle at 1.561%. There is a Fed meeting approaching, and with the other major indices settling close to all-time highs on Friday, a breakout to the upside in the major indices could lead to lower yields. Will the weak jobs number be the Fed’s fundamental catalyst to more dovish inclinations? The possibility exists.

Review of Our Latest ETF Picks

Now that the big jobs number is out of the way, and since we have covered so much during the month of May and into early June, I thought it would be an opportune time to recap some of the existing markets that we are following in greater depth. Let’s jump right in:

  1. (GRIDFirst Trust Nasdaq Clean Edge Smart Grid Infrastructure Index Fund. GRID analysis was first introduced in the May 6. 2021 publication with an idea buy level between $86.91 and $88.17.

The idea level was traded through between May 11 - May 13. GRID settled on Friday, June 4, at $91.64.

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Disclaimer: This content is for informational and analytical purposes only. All essays, research, and information found above represent analyses and opinions of Rafael Zorabedian, and Sunshine ...

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Erikas Ivan 2 weeks ago Member's comment

Great job on your recent GRID calls!