US jobs data likely to produce volatility

Crispin Murray, BT Investment Management’s Head of Equities says the general trends that drove markets higher over the past couple of months may see a significant reversal this week – and possibly for several weeks to come – as a result of Friday night’s disappointing US non-farm payroll figure. The addition of only 38,000 jobs in May, versus 162,000 expected, caught the market by surprise. The implications for the Australian market is that bond-sensitives such as REITs and infrastructure stocks are likely to outperform, along with resources as commodity prices respond to a weaker USD, while companies with offshore exposure such as health care are likely to be under pressure. Whether this is a short-term trend, or has further legs, comes down to whether May’s weak job data is a one-off or indicates a deeper trend – something that won’t be revealed until June’s non-farm payroll figure. Read Crispin's short-to-medium-term outlook here: (VIEW LINK)