NFP day sees S&P 500 hit another record

Heading into the close the FTSE 100 is flat, while on Wall Street the Dow, S&P 500 and Nasdaq 100 are all higher.

• US jobs report beats forecasts
• But mixed outlook on wages keeps stocks calm
• Renewed VIX declines point to quiet summer ahead

While stock markets have tempered some of their initial post-NFP excitement but the overall atmosphere is still a positive one. American traders already have one foot out the door ahead of the long weekend, with volumes seeping away even now, which points towards Monday as one of those days on trading floors when admin gets done or frivolous games are enjoyed by bored traders. Today’s NFP number is certainly moving in the right direction, gaining by yet another solid amount, but with earnings still only rising by a small amount and the headline unemployment rate actually ticking up there was no rush away from stocks and towards assets likely to benefit from an earlier than expected tightening of policy. Indeed, so far this afternoon small caps have been firmly out of favour while tech stocks are once again making great strides, a sign that the rotation back to growth from value still has some room to play out. 

A fresh lurch down for the Vix also points to the future, in that we can expect the quiet trading of recent weeks to remain and if anything get quieter. Usually stocks weaken into the summer while volatility rises, but 2021 continues to confound with an environment that suggests the exact opposite. Despite expectations of a major selloff, one stubbornly refuses to arrive, even when the Fed appeared to invoke a major change in policy. Such a resilient market is great for most investors, but will not do much for bank trading revenues, something that may crop up as earnings season gets underway in two weeks’ time.