Get Ready for the US Stock Markets

U.S. stocks have bullish momentum to send the S&P 500 (IVV) and Nasdaq (QQQ) higher this week. Buyers aggressively bought stocks after the Bureau of Labor Statistics posted strong jobs data. Tariff fears eased when President Trump said three cabinet officials will China’s representatives in London today. Discussion of a trade deal does not imply a final agreement. China has an edge in the trade negotiations. It may limit the export of rare earths. The technology and automotive sectors rely on those resources.The 20+ Year Treasury (TLT) sank, lifting yields, after nonfarm payrolls increased by 139,000 in May. However, the BLS revised April’s employment down to 147,000. The unemployment rate is steady at 4.2%. By comparison, Canada’s unemployment rate is 7%, its highest level since 2016 and excluding the pandemic era.Currency investors may bet on the U.S. dollar strengthening. The DB USD Index Bullish Fund (UUP) has support at $27.00. The Canadian dollar (FXC) continued to trend higher. After closing at $71.40, it is around 2% below its 52-week high. Weak Canadian employment would push the Bank of Canada to cut rates, weakening FXC ETF.The FOMC, by comparison, has no reason to cut rates. September is the earliest for a rate cut, and again in December. This view may change, as it depends on the trade negotiation progress.