What PMI Data Says About the NFP Report: 3 Hidden Opportunities

iShares 20+ Year Treasury Bond ETF (TLT) - The iShares 20+ Year Treasury Bond ETF (TLT) closed at $85.43, down by $0.03 (-0.04%) with a 52-week range between $85.04 and $101.64 [1] - The ETF has a dividend yield of 4.39% and assets under management totaling $50.35 billion [1] - Bond prices recovered after a brief sell-off following the NFP report, indicating potential buying opportunities [1] - Goldman Sachs has recommended bonds, suggesting a potential upward trend for the bond ETF [1] Non-Farm Payrolls (NFP) Report Impact - The NFP report exceeded consensus expectations by nearly 100,000 jobs, leading to a significant sell-off in the SPDR S&P 500 ETF Trust (SPY) [5] - The report showed job growth primarily in the financial and retail sectors, driven by seasonal factors [5] - The manufacturing sector experienced a 28-month consecutive contraction in employment, while the services sector added mostly part-time and seasonal jobs [7][9] - The NFP report may not reflect real economic growth, as full-time jobs are more indicative of economic expansion [6] Schwab US Dividend Equity ETF (SCHD) - The Schwab US Dividend Equity ETF (SCHD) is not among the top five stocks recommended by top-rated analysts [3] - The ETF offers a dividend yield of 9.38% with assets under management of $65.32 billion [14] - Shareholders receive up to $2.56 in dividend payouts per share, providing a cushion against potential economic volatility [14] Energy Select Sector SPDR Fund (XLE) - The Energy Select Sector SPDR Fund (XLE) closed at $90.25, up by $1.86 (+2.10%) with a 52-week range between $78.98 and $98.97 [10] - The fund has a dividend yield of 3.57% and assets under management of $33.71 billion [10] - Goldman Sachs and Warren Buffett have both shown a preference for oil, with Buffett acquiring up to 29% of Occidental Petroleum Co. (OXY) [11] - Hedge funds are increasing positions in oil futures, indicating a bet on higher oil prices [12] Market Implications - Higher bond prices lead to lower bond yields, prompting income-focused investors to seek alternatives such as dividend stocks [13] - The economy may face downward revisions in job numbers, similar to the 818,000 jobs erased from the NFP in August 2024 [9] - Investors are advised to consider opportunities in bonds, dividend stocks, and the energy sector to navigate potential economic volatility [5][14][12]