Labor Market sends Red Alert 05/06/2025

HOT stories for today

US market wrap:

• In Wednesday’s session, the Dow Jones Industrial Average slipped 0.22%, ending a five-day winning streak. The S&P 500 inched up 0.01%, while the Nasdaq Composite climbed 0.32%. Private-sector payrolls increased by just 37,000 in May, well below the Dow Jones forecast. The disappointing ADP data arrives ahead of Friday’s official nonfarm payrolls and unemployment rate release.
• Despite the weak jobs print, investor sentiment remains supported by strong tech-driven gains and a standout first-quarter earnings season. Still, caution lingers amid concerns that additional Trump-era tariffs could trigger renewed market volatility. In after-hours trading, shares of Five Below and MongoDB jumped 4% and 14%, respectively, after both companies reported earnings that beat expectations on both revenue and profit for the first quarter.

Labor Market sends Red Alert

• President Donald Trump renewed his push for interest rate cuts on Wednesday, just minutes after ADP reported the weakest private sector job growth in over a year. May’s payroll increase of just 37,000 jobs—well below the 110,000 expected—marked ADP’s lowest reading since March 2023. The White House confirmed Trump told Powell directly in a recent meeting that failing to cut rates was a mistake.
• Meanwhile, concerns are growing among economists as the Labor Department trims inflation data collection due to a government hiring freeze, potentially compromising key economic indicators. Adding to the cautious tone, the latest Fed Beige Book pointed to a slight decline in economic activity, while Fed official Neel Kashkari acknowledged early signs of labor market weakness.

Stock’s on the move:

• Five Below (FIVE) — Shares of the discount retailer climbed 2.5% following upbeat Q1 earnings and solid Q2 guidance. The company posted adjusted EPS of $0.86 on $971 million in revenue, outperforming LSEG’s forecast of $0.82 per share on $967 million. Additionally, CFO Kristy Chipman announced her departure from the company.
• MongoDB (MDB) — The database software provider’s stock surged nearly 12% in after-hours trading after exceeding both earnings and revenue estimates and raising its fiscal 2026 outlook. MongoDB reported adjusted earnings of $1.00 per share on $549 million in revenue, topping analyst projections of $0.66 on $528 million.
• Planet Labs (PL) — Shares of the satellite imaging firm soared 15% after the company recorded its first-ever quarter of positive free cash flow, totaling $8 million. The company also surpassed LSEG expectations for the first quarter.
• Verint Systems (VRNT) — The customer engagement solutions provider jumped nearly 19% after reporting adjusted Q1 earnings of $0.29 per share on $208 million in revenue, beating LSEG estimates of $0.22 per share on $195 million.

                                        Watchlist: MDB, FIVE, PL, VRNT, NVDA, AAPL, CIEN, AVGO



Today’s action

• Asia-Pacific markets were mixed on Thursday following a weak U.S. private sector jobs report, which showed the slowest hiring pace in over two years — raising fresh concerns about the impact of trade policy uncertainty on the world’s largest economy. South Korea’s Kospi extended gains, rising 1.33%, while Japan’s Nikkei 225 slipped 0.42%. Hong Kong’s Hang Seng Index added 0.46%, and China’s CSI 300 remained mostly flat.
• In the U.S., stock futures were little changed Wednesday night after the Dow Jones Industrial Average ended a four-session winning streak. Futures tied to the Dow dipped 23 points, or less than 0.1%, while S&P 500 futures edged down 0.07% and Nasdaq 100 futures declined 0.06%. Investors are now eyeing weekly jobless claims data due Thursday, ahead of Friday’s closely watched nonfarm payrolls report. On the earnings calendar, Brown-Forman (BF.B) will report results Thursday morning, followed by Broadcom (AVGO), DocuSign (DOCU), and Lululemon (LULU) after the closing bell.

Bitcoin

• Bitcoin traded slightly lower over the past 24 hours, slipping 0.70% to $105,234.99, as price movement remained muted in the wake of renewed political pressure on the Federal Reserve. Former President Donald Trump once again publicly criticized Fed Chair Jerome Powell, urging an immediate rate cut following disappointing U.S. job data — though crypto markets appeared largely unmoved by the remarks.
•  Over the past week, BTC has shed 2.08%, with price action on Thursday remaining tightly confined within a narrow range between $104,232.70 and $106,457.19, reflecting growing indecision among traders. The broader crypto market posted similar results, with overall capitalization down about 0.72%. Meanwhile, trading volume slid 6.15% to $44.48 billion, suggesting cooling momentum and reduced short-term speculation across major tokens.Watchlist: Bitcoin: 100 000-112 000, Ethereum:1500-2800, Solana: 80-183

Forex

• The EUR/USD pair held just above 1.1400 in Thursday’s Asian session, trading cautiously ahead of the European Central Bank's rate announcement at 12:15 GMT. The ECB is widely expected to cut its Deposit Facility Rate by 25 basis points to 2%. Meanwhile, soft U.S. data has raised stagflation concerns, putting added focus on Friday’s upcoming nonfarm payrolls (NFP) report.
• Elsewhere, the Japanese Yen (JPY) weakened slightly against the U.S. Dollar, with USD/JPY climbing back above 143.00. However, downside in the yen appears limited, as expectations for further BoJ rate hikes and safe-haven demand continue to offer underlying support. Fresh data showing a fourth straight monthly decline in Japan’s real wages—despite persistent inflation—added to the policy divergence narrative but reinforced the case for continued tightening by the BoJ.
  Watchlist: EUR/USD: 1.0700-1.1600, USD/JPY: 140-151

Basic Materials

• Gold (XAU/USD) dipped slightly on Thursday after reaching an intraday high near $3,384, as a modest U.S. Dollar rebound capped gains. Still, gold remains supported by Fed rate cut expectations, fiscal concerns, and geopolitical risks, which continue to favor a bullish outlook. Weaker U.S. data this week has reinforced bets on more Fed easing in 2025, keeping Treasury yields low and limiting downside for the metal.
• Meanwhile, WTI crude oil fell to around $62.00, pressured by fears of global oversupply after Saudi Arabia signaled possible production hikes. A larger-than-expected draw of 4.304 million barrels in U.S. inventories offered some support, while geopolitical tensions and uncertainty around Iran’s nuclear stance may help prevent deeper losses.
  Watchlist: GOLD 2600-3500, US Oil: 55.60-70.00
  
   

Key Economic Events Today:

EST time
08:30 am: USD Unemployment Claims
08:30 am: USD Trade Balance
12:00 pm: USD FOMC Member Kugler Speaks
01:30 pm: USD FOMC Member Harker Speaks


Earnings

BMO (Before the US Market opens)
CIEN          Ciena Corp.
TTC           Toro Company
AMC (After the US Market closes): AVGO, LULU, IOT, DOCU

 

The TEFS Analyst team wishes you a successful day!