Daily Market Review 1 of June
“Sell in May and go away”?? In the past month all major U.S. indexes had put in a half year winning streak; The Dow Jones Industrial Average finish out the month with a 6.2% loss. The S&P 500 suffered a similar fate with a monthly decline of 6.3% and the Nasdaq went even further with a monthly loss of 7.2%.

Us index loss is looking relatively modest compare to the their peers indexes over at Europe; Spain’s IBEX leading the way south with a decline of 13%, the German DAX dropping 7.3%, Hong Kong off 12% and the Nikkei dropping 10% for the month.

The month’s losses were mainly driven by the chaos in Greece and Spain and fear over a financial demise of the Euro and Eurozone economies and an ongoing slew of economic reports that point to slowing economies in the United States, Europe and China.

Worries over Europe were a big driver of global markets this month as policy makers struggled with Spain’s banking crisis and the Greek elections rapidly approach on June 17th. Both of these situations have the potential to be both Euro-negative and stock market negative as we move into June.

Yesterdays preliminary ADP Jobless report and the rest of the data that came out from the US didn’t show a better look at the world’s largest economy. Yesterdays reports were mostly gloomy, as well, as private payrolls reports from ADP came in below expectations, weekly jobless claims rose, 1Q GDP estimate was revised downward to 1.9% from the most recent 2.2% and Chicago PMI for May declined to 52.7 from last month’s 56.2%. Anything above 50 in this report indicates expansion but clearly the numbers are decelerating as we move into the summer months.

The report itself showed that the US ADP Private payrolls rose 133,000. The increase was led by increases in service small businesses sectors. The average estimates were 148,000 jobs increased in this may report, April’s numbers was revised to 113,000 from 119,000.

2 major events will dominates the markets today, over at Europe; Irelands will count of the votes cast in the referendum on the EU fiscal compact, which took place on Thursday, is due to start at 8:00 GMT. It is widely expected that the result will be a 'yes.'

The US NFP-Non Farm Payrolls and the unemployment rate that will go out at 12:30GMT; The NFP numbers is likely to show the same picture as the last two, which marked a slowdown on the US labor market. Rapid job growth seen at the turn of the year has moderated significantly and analysts contributing to the special forecast report agree that employment will continue expanding at a similar pace for the next few months.

This month experts' predictions range between 80000 and 175000 jobs added and the average numbers stands at 150,000.

The unemployment rate is expected to remain unchanged at 8.1%, or even drop further to 8.0%, but as Analyst points out, 'this however, although apparently positive, will likely be a consequence of an reduction in the labor force, something the FED keeps ignoring.'


The single currency keeps the negative trend against the greenback on Friday after the series of PMI prints in France, Germany, Spain and the pan-European composite have come in above expectations during May.

Support Levels; 1.2300, 1.2270, 1.2240

Resistance Levels; 1.2364, 1.2430, 1.2460