The FTSE 100 is unchanged heading into the close, while the Dow, S&P 500, and Nasdaq 100 are all higher on Wall Street.
The US jobs report came in ahead of expectations.
However, the stock market remains calm due to the uncertain view on wages.
VIX drops have been renewed, indicating a quiet summer ahead.
While the financial markets have lost some of their immediate post-NFP euphoria, the overall mood remains upbeat. American traders had one foot out the door ahead of the long weekend, with volumes already dwindling, pointing to Monday as one of those days on trading floors when admin is completed or bored workers play frivolous games. Today’s NFP number is certainly improving, rising by another solid amount, but with earnings still only rising by a small amount and the headline unemployment rate actually ticking up, there was no rush away from stocks and toward assets that could benefit from a policy tightening sooner than expected. Indeed, small caps have been firmly out of favor this afternoon, while tech stocks have once again made significant gains, indicating that the rotation back to growth from value still has some room to play out.
A new lurch down for the Vix also signals to the future, indicating that the sluggish trading of previous weeks will continue and, if anything, become even quieter. Normally, stocks fall in the summer as volatility rises, but the year 2021 continues to be perplexing due to a climate that suggests the exact opposite. Even when the Fed looked to evoke a big policy change, one stubbornly refused to arrive, despite expectations of a major selloff. While a strong market is good for most investors, it won’t help bank trading income, which might become a problem as earnings season begins in two weeks./n
