Friday's jobs report showed signs of a slightly cooling labor market. The U.S. added 206,000 jobs last month, edging expectations. But the unemployment rate rose slightly to 4.1% and average hourly earnings were up 3.9% from a year earlier, the smallest gain since 2021. The report didn't drastically change investors' views on interest rate cuts: Traders now think there's a 74% chance the Fed will cut rates at least twice by the end of the year, up from 70% on Wednesday. The 10-year Treasury yield edged down 0.074 percentage point to 4.272%. Equities rallied, with the tech-heavy (and therefore interest-rate sensitive) Nasdaq Composite gaining 0.9% and the S&P 500 increasing 0.5%. The Dow Jones Industrial Average ended the day up 0.2%, or 68 points. All three indices were up for the week. Over in the U.K., stocks rose after the center-left Labour Party won in a landslide, placing the party in power for the first time in 14 years. The domestically focused FTSE 250 index rose 0.9% and U.K. government bond yields fell.
Macy's shares jumped 9.5% after The Wall Street Journal reported late Wednesday that Arkhouse Management and Brigade Capital raised their offer price for the department store chain to $24.80 a share, up slightly from the last offer of $24. Friday's gain still leaves the company's shares about a fifth cheaper than the latest offer price, reflecting skepticism that the deal will materialize. Deal or no deal, one silver lining for Macy's investors is that whatever Arkhouse and Brigade Capital saw in their due diligence was good enough to raise the bid, even if it was by a small margin.
Here’s what else Heard on the Street was watching: Live Markets Snapshot Crude oil, Bitcoin USD and gold continuous contract data refresh every time you open this email. Other data are as of market close.
MEMBER MESSAGE: Mansion Global Boutique Host and Housewarming Gifts For the homeowner who has it all, creative presents that are practical and pretty. Read More
Why the Walmart Model Doesn’t Work in Healthcare By David Wainer ILLUSTRATION: NICK LU Walgreens and Walmart are just two prominent examples of a retrenchment among big players in healthcare. In recent years, everyone from large retailers to private-equity firms to insurers have been jockeying to acquire doctor chains. The market top came sometime between mid-2022 and early 2023. Within a span of eight months, Amazon.com said it was spending $3.9 billion to buy the primary-care chain One Medical; a Walgreens unit struck a $9 billion deal to expand its medical practices; and CVS Health agreed to spend a whopping $10.6 billion on the primary-care chain Oak Street Health. At the time, it seemed inevitable that the doctor’s office was increasingly going to be a big-box service—something you do on your way to the snack aisle. It hasn’t worked out that way.
The Wall Street Journal’s Evan Gershkovich is being wrongfully detained in Russia after he was arrested while on a reporting trip and accused of spying—a charge the Journal and the U.S. government vehemently deny. Follow the latest coverage, sign up for an email alert, and learn how you can use social media to support Evan.
Tempted by Japan’s Booming Market? Be Like Warren Buffett By Jacky Wong PHOTO: THE ASAHI SHIMBUN/GETTY IMAGES Warren Buffett once said he focused only on things that are important and knowable. Currency fluctuations aren’t one of them—they might be important, but they aren’t knowable. He has made a killing recently investing in Japan, and investors who followed his lead have too—a lesson in diversification. Japanese stocks have been booming: In the past five years, the MSCI Japan Index, measured in yen, has gained 87%, beating even the mighty S&P 500. Yet if U.S. investors had just jumped into the largest Japan-focused exchange-traded fund, they would have made much less. The iShares MSCI Japan ETF has generated only a 36% total return in the past five years as the yen has lost a third of its value against the dollar over the period. Individual investors can’t copy Buffett by borrowing in Japanese yen, but they can let the ETFs do the hedging for them. The currency-hedged Japanese ETF from iShares has gained 31% in the past year compared with 12% for the unhedged version.
In Brief For order-loving financial markets, the silver lining around Europe’s stormy politics is that candidates tend to veer to the center when they govern. Britain under new Prime Minister Keir Starmer may prove to be an exception, writes Jon Sindreu. Artificial intelligence has given Samsung Electronics a boost, but the South Korean semiconductor company still has a lot of catching up to do, writes Jacky Wong. Enjoying this newsletter? Get more from WSJ and support our journalism by subscribing today with this special offer. Today's Markets News Sam Bankman-Fried's Campaign Spending Spree Was a Family Affair JPMorgan Warns Customers: Prepare to Pay for Checking Accounts Wall Street Bids Adieu to Its Biggest Bear
What's Coming Up Companies reporting earnings next week include Conagra Brands, PepsiCo, Delta Air Lines, JPMorgan and Citigroup. The June inflation reading is scheduled to come out next Thursday. You Heard It Here First In late May, Heard Editor Spencer Jakab wrote that cruise lines' share prices weren't reflecting the companies' improving business and balance sheet health, highlighting Carnval in particular. About a month after the column, Carnival reported quarterly results that handily beat Wall Street expectations and raised its guidance. Carnival is up 14% since the column was published, while Royal Caribbean and Norwegian are up 6% and 5%, respectively. 'Business has continued to improve, but investor sentiment hasn’t: Shares of both Carnival and Norwegian have taken on water since that rally. That pessimism presents a buying opportunity for stock of all three cruise lines.' — Spencer Jakab
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