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Markets

Stocks experienced a slight decline to close the week, as investors grappled with the implications of the significant jobs report. While a high number of jobs is generally positive, it also suggests that interest rates may remain unchanged for a longer period. AMC faced challenges, with a 15% drop, indicating a waning enthusiasm for the latest meme stock trend.

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Economy

Jobs Are On The Rise

Economic observers were taken aback by the robust job growth recorded last month: Payrolls surged by an additional 272,000 jobs in May, surpassing analysts' predictions of a 190,000 increase, as per government data released yesterday.

The most significant employment boosts were witnessed in healthcare (68,000 jobs), government (43,000), and hospitality (42,000). Additionally, average hourly wages rose by 0.4% from the previous month and 4.1% over the year, exceeding analysts' expectations.

However, the unexpectedly strong employment figures have left many scratching their heads, especially amidst signs of slowing economic growth as consumer spending retreats. This resilience in the job market has dampened hopes for imminent interest rate cuts from the Fed, affecting investors and loan seekers alike.

The perplexing aspect:

For analysts delving into the details, the jobs report presented a mixed bag of signals akin to a malfunctioning traffic light.

Although the unemployment rate inched up to 4% from April's 3.9%, ending a 27-month streak below 4%, a household survey indicated a decline of 408,000 Americans in employment from April to May.

Some economists argue that the household survey fails to accurately capture the contributions of immigrant workers, who have been pivotal in recent workforce growth. However, others contend that this downturn aligns with broader trends in the labor market, as job openings hit a three-year low in April, and many recent graduates struggle to secure employment.

Nevertheless, significant job gains suggest a likelihood of sustained interest rates. Few anticipate a rate cut before autumn, with investors evenly split on the prospects of one in September. Realtors foresee mortgage rates averaging 7% for at least the next month.

Environment

Is It Way Too Hot Outside?

In parts of the US Southwest and California, unprecedented heat is gripping the region as a heatwave originating from Mexico extends northward. On Thursday, Phoenix set a new daily record high of 113 degrees Fahrenheit, while Las Vegas soared to 111 and Needles, California, reached an unprecedented 115. At a Donald Trump rally in Phoenix, nearly a dozen individuals were hospitalized due to the extreme heat. Meteorologists anticipate the heatwave to progress further northward into Oregon and Washington. These extraordinary temperatures follow closely after India registered its highest-ever temperature of 126 degrees Fahrenheit. Scientists attribute the intensification and increased frequency of heatwaves to climate change.

Markets

Roaring Kitty’s Position Plunged

Keith Gill, known as Roaring Kitty, made his return to YouTube with his first signature livestream in three years. Despite his previous influence in boosting GameStop's stock, the video game retailer might have wished he hadn't taken the microphone, especially as the company surprise-released its earnings on the same day.

With an audience of around 600,000 viewers, Gill's livestream started approximately 25 minutes late, leading to a decline in GameStop's stock from about -20% to -30% as people waited for him. Despite the anticipation, Gill didn't offer much of a game plan, stating he just wanted to check in and see what was happening.

Throughout the roughly 50-minute stream, Gill mainly expressed confidence in GameStop's future and interacted with viewers in the comments section while holding a beer. He ended the stream when the $GME stock reached -40% intraday after multiple volatility halts, jokingly suggesting he didn't want to contribute to further declines (though it closed the day at -39%).

As for GameStop's performance, the retailer raised $1 billion by selling 45 million shares following Gill's return to social media last month, with plans to sell another 75 million. However, the company reported a 29% decline in first-quarter sales compared to last year.

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