Contract for futures; Dow Jones Industrial Average

 In the wake of Friday's NFP, Dow futures barely changed.

The majority of retail traders are now short, and CoT speculators are moving closer to a heavy sell bias.To receive this information and more in an intricate and thorough report detailing the forex majors, commodities, and indexes before the European open, sign up for IG's Daily and Weekly Market Report.
The law to prevent a default was passed quite quickly, which refocused attention on other aspects. Last Friday, this contained significant labour market data. The Bureau of Labour Statistics provided us with a respectable Non-Farm Payrolls (NFP) estimate of 339K for May.

This number came with upward revisions for March and April and was significantly higher than the 190K estimates.

Highlights and weaknesses in the report on labour statistics

The report had certain shortcomings, though. Due to a 310K decrease in the household survey, the unemployment rate increased from 3.4% to 3.7% and is now significantly higher than expected. At 34.3, the average weekly hours were a little lower. The rate of wage growth, which was in line with expectations, was 0.3% month over month (m/m).
However, the prior 0.5% figure was reduced to 0.4%, and the year-over-year (y/y) print came in slightly below expectations at 4.3%. The labour force participation rate, which was on hold at 62.6%, was another item. The employment-population ratio was slightly lower at 60.3% while the underemployment rate was a tad higher at 6.7%.

The manufacturing PMI indicates declining and contracting numbers.
The day prior, there were a few goods for sale. The manufacturing PMI (Purchasing Managers' Index) recorded contraction and declining numbers for the same month. ISM (Institute for Supply Management), which scored 46.9, and S&P Global, which scored 48.4, both agreed with this.
While the employment component of the former showed signs of recovery, new orders and prices paid deteriorated to 42.6 and 44.2, respectively.

Harker of the Federal Reserve discusses prospective monetary policy

There was the Federal Reserve's (Fed) Harker in central bank lingo. He emphasised pressing "the stop button for one meeting and see how it goes" before to the NFP release. He mentioned being "at the point, or very close to the point" of being in a restricted area.

Future central bank policy was shown by market pricing (Refinitiv) to largely remain within the 5-5.25% range. A majority favours a 25bp (basis point) hike at the July meeting, but if it happens, it will be reversed by the end of the year.

Key index performance and bond market conditions

Important indices ended the week in the black. 

This time, the Dow outperformed and moved its daily technical review, which had only previously been shifted. Regional banking ETFs saw advances for a third week in a row off their lows. Concerns about commercial real estate are still present.

The majority of Treasury yields decreased week over week in the bond market. The gains on Friday fell short of erasing all of the losses since last Monday.

Results of the OPEC+ summit and oil prices

The OPEC+ summit was related to energy. With lower production objectives starting in January, they extended the voluntary cuts from the end of this year through the end of 2024. After Saudi Arabia unilaterally decided to reduce its production by one million barrels per day for July, oil prices spiked. Additionally, they provided room for extensions.

Economic developments anticipated over the coming week

The upcoming week's events begin with the services PMIs for May. Whether using S&P Global or ISM indicators, the US is anticipated to exhibit expansion. There is also the issue of new bonds from the US Treasury to refill the TGA, with sales set to begin today, despite the fact that it is not on the economic calendar.

With the regular inventory measurements from the API (American Petroleum Institute) and EIA (Energy Information Administration), the middle of the week becomes more relaxed. Weekly unemployment claims and mortgage applications will both be submitted. Between trade and consumer credit, these will be wedged.According to Baker Hughes' weekly rig count data, the week's finish is the lightest. There won't be any member talk available because of the pre-meeting blackout period imposed by the Fed.

Technical overview, techniques, and levels for the Dow

It was and is currently displaying a positive technical bias for the weekly time period. Weekly contrarian buy-breakouts off its prior weekly 1st Resistance gained somewhat more than conformist sell-after-reversal tactics.

However, the transition was more obvious on a daily basis. After Friday's rises, its earlier technical analysis, which depicted a bear average, quickly changed.

Regarding the Dow, IG client* and CoT** sentiment

Regarding attitude, the large price increases over the past week have caused a change among retail traders. They began last week with a little buy 53% and are beginning this week just shy of a major sell zone.

CoT speculators have increased their degree of heavy selling to 68% (long positions -1,168, short positions -2,089). They continue to be primarily short the S&P 500 (77%) and the Russell 2000 (67%), with the exception of the tech-rich Nasdaq 100, where they are somewhat in the buy (54%) camp.

*The proportion of IG customer accounts that are currently long or short in this market. as of this morning at 8am, rounded to the closest 1% for the outer circle. The inner circle represents the prior trading day.*CoT mood is derived from the CFTC's Commitment of Traders report; the outer circle represents the most recent data, which was released on Friday and contained positions as of last Tuesday, and the inner circle represents the report before.