In 30 seconds: A wave of economic data releases showed US job openings ticking up to 7.6 million and a two-year high vacancy rate, while consumer confidence missed estimates, home prices edged higher, and Germany's inflation surprised to the downside with core prices remaining sticky. Analysts argue the S&P 500 has effectively split into AI and non-AI asset classes, with AI stocks comprising 44% of market cap and driving record index concentration, while equal-weighted indices and non-AI stocks are beginning to diverge from cap-weighted performance. Physical oil markets weakened sharply with buyers absent even at record discounts for West African crudes, while US total oil production hit an all-time high in April and Kuwait's output recovered to 73% of pre-war levels faster than expected. Central banks globally are responding differently to the same economic shock, with Colombia hiking rates again and the Japanese yen hitting a 40-year low, while gold fell below $3,000 per troy ounce heading for its worst quarterly performance in over a decade amid rising rate expectations.
The US labor market is doing that thing where it refuses to collapse on schedule. May job openings came in at 7.5948 million, comfortably above the 7.296 million estimate and roughly in line with the prior reading, which was revised down to 7.585 million. The private-sector vacancy rate hit 4.8%, a two-year high, up from 4.1% in December. The ratio of job vacancies per unemployed worker rose to 1.03, also up from 0.87 in December. The job openings three-month average sits at 7.36 million. Two measures of job openings show the labor market stopped getting softer around the end of last year, and hiring and layoff rates have moved sideways at cyclically low levels. Claims remain low. So the job market is not softening, but it is not exactly tightening either. It is just sitting there, which is its own kind of statement. Consumers, meanwhile, are less sanguine. The June Consumer Confidence Index landed at 91.2, missing the 94.4 estimate. The prior month was revised down to 90.6. The present situation sub-index fell to 116.4 from 119.4, while expectations edged up to 74.4 from 71.4. Firms cited inflation as their primary concern for the next six months, according to a special question in the June Dallas Fed manufacturing survey. Home prices kept grinding higher. The April S&P Cotality Case-Shiller 20-City Home Price Index rose 1.14% year over year, up from 0.88% prior. The April National Home Price Index gained 0.85%, versus 0.73% previously. Germany net investment runs at just 0.2% of GDP, new projects cost 40%–250% more than the world's best sites, and permits take 200 days. The old industrial powerhouse is in maintenance mode: too expensive, too slow.
The S&P 500 closed at 7,499.36, up 0.79% on the day. A BofA strategist noted in the May 22 "Flow Show" report that the stock market is the most concentrated in a single theme in 150 years. That is a long time to look back and still not find a precedent. Here is the basic math. The S&P 500 hit its last all-time high on 2025-06-02, then fell 3.36% over the following three weeks. During that same stretch, the 459 non-AI stocks rose 2.76%. The cap-weighted index went down; the stuff inside it, measured democratically, went up. The S&P 500 equal-weighted index has caught up to the cap-weighted index, with breadth improving to 65%. When the median stock has to sprint just to match an index dragged around by a handful of semiconductor companies, you are not really diversifying by owning "the market." Micron net income up 15x in a year. You do not get those numbers from broad enthusiasm about equities. You get them from one trade, expressed with increasing conviction, in an index that was designed to represent something else entirely.
The physical oil market is telling you something, and it is not subtle. The session amounted to an awfully weak trading day in the physical windows. Sellers offered the largest ever discounts for some WAF crudes, and buyers are not emerging. US total oil output hit 21.836 million barrels per day in April, a new record for monthly total oil output. That figure was revised up by 565,000 barrels per day from the initial estimate for the month based on weekly data. Kuwait's production has climbed back toward 73% of its prewar level of approximately 2.6 million barrels per day, up sharply from barely more than 20% on average in May. Production has climbed to 1.9 million barrels per day, or 73% of the country's prewar level of approximately 2.6 million barrels per day. On average in May, output was barely more than 20% of prewar capacity. Tanker flows through the Strait of Hormuz remain robust: 8 entered the Gulf yesterday, with the trailing ten-day average capacity running at approximately 10 million barrels per day. Separately, Carol Howle is retiring from her BP deputy CEO (and head of trading) role three months after she was promoted to the deputy job, with Sam Skerry taking over. Three months is a short tenure for a deputy CEO role.
The premise of coordinated global monetary policy was always a polite fiction, but the fiction is getting harder to maintain. Central banks are reacting differently to the same global shock, including within the G-7. Start with Colombia interest rates. Consecutive hikes this year: three of them, the latest a 75 basis point move that brought the policy rate to 12%. The yen hit a 40-year low against the US dollar, trading at ¥162.30. The US dollar has climbed 7% over the past five months. Then there is gold. The metal closed at $4,034.10 on June 30, up 0.29% on the day, which sounds fine until you zoom out. Gold is down 26% over five months. Silver has done worse, down 50% over the same stretch, though it managed a 2.68% bounce on the day to $59.74. Today marks the beginning of a series of US labor market data releases, culminating in tomorrow's monthly jobs report.
Here is where the labor market stands for your paycheck.
Initial jobless claims: 215,000, down 5.29% on the week
Continuing claims: 1,821,000, up 1.17% on the week
Job openings (JOLTS): 7,594.00, up 0.12% on the month
Quits rate: 1.90, flat 0.00% on the month
Unemployment rate: 4.30, flat 0.00% on the month