After a monthly report showed that employment was stronger than predicted as the economy recovers from the COVID outbreak, U.S. market indexes climbed Friday afternoon, heading into a long holiday weekend. Investors are watching the jobs numbers because, despite a record number of job postings, the labor market recovery has been uneven in the aftermath of the devastating pandemic.
The bond market in the United States will shut an hour early on Friday and will be closed on Monday in commemoration of the Fourth of July holiday, which comes on a Sunday this year. What is the current state of benchmark trading?
The Dow Jones Industrial Average (DJIA) is a stock market index
DJIA,
0.44 percent increase
At 34,788.95, it was up 155.42 points, or 0.5 percent, from its May 7 closing high of 34,777.76. The blue-chip index’s gains are hampered by news of an IBM leadership shift and a Boeing Co. report concerning a water land.
BA,
minus 0.72 percent
a cargo plane
The S&P 500 index is a stock market index that measures the performance of
SPX,
0.66 percent increase
The stock rose 26.19 points, or 0.6 percent, to 4346.14, breaking the intraday high of 4,340.70 established around lunchtime.
The Nasdaq Composite Index (Nasdaq) is a stock market index
COMP,
0.67 percent increase
At 14,611.18, the stock was up 88.81 points, or 0.6 percent. This is higher than the intraday high of 14,607.83.
The S&P 500 gained 22.44 points, or 0.5 percent, to close at 4,319.94 on Thursday; the Dow gained 131.02 points, or 0.4 percent, to close at 34,633.53, within striking distance of its record close of 34,777.76 set on May 7. The Nasdaq Composite rose 18.42 points, or 0.1 percent, to 14,522.38.For the week, the Dow was expected to gain 1%, marking its second consecutive weekly gain; the S&P 500 was expected to gain 1.5 percent, marking its second consecutive weekly gain; and the Nasdaq Composite was expected to gain 1.8 percent, marking its second consecutive weekly gain. The United States added 850,000 jobs in June, the most since March, while employment growth in May were revised up to 583,000 from 559,000 in May. According to economists polled by The Wall Street Journal, the United States added 706,000 new jobs in June. In an interview Friday, James McCann, deputy chief economist at Aberdeen Standard Investments, said that “very strong gains in hospitality and leisure,” areas hit hard by the pandemic, signal that “we can achieve a much fuller recovery” in sectors that have been running at low capacity or partially closed due to COVID-19 fears. According to McCann, growth in the labor market isn’t robust enough to stir investor anxieties that the Federal Reserve would have to start reducing its quantitative easing program or raise rates quicker than expected. The job market still has “a lot of spare capacity,” despite the “strong speed” of recovery from the COVID-19 crisis. Unemployment jumped to 5.9% in June from 5.8% in May. According to Rick Rieder, BlackRock’s chief investment officer of global fixed income and head of the asset management giant’s global allocation investment team, this is “primarily due to the return of workers to the labor force.” “Despite the robust headline gain of 850,000 jobs, today’s employment data is more about whether employers have found enough workers to fill the increasingly, and historically, enormous job openings,” Rieder said. According to the jobs report, “the ratio of job openings/unemployed is approaching pre-pandemic highs, and the ratio of quits/layoffs has soared to multi-decade highs.” Meanwhile, average hourly earnings in the United States rose 10 cents to $30.40 in June, and the U.S. workweek fell 0.1 hour to 34.7 hours last month. In emailed remarks, Sameer Samana, senior global market strategist at Wells Fargo Investment Institute, said, “The average workweek dropped while the participation rate maintained unchanged, indicating that the recovery is gradual and uneven.” In June, the labor-force participation rate, which measures the proportion of able-bodied adults 16 and older who are employed, was 61.6 percent, the same as in October. Other analysts characterized the closely watched employment report’s findings as progress, but not nearly enough to reverse the economic downturn that occurred during the peak of the pandemic’s economic impact in the United States. Daniel Vernazza, UniCredit’s chief international economist, estimated that, after accounting for workers who incorrectly classified themselves as “unemployed bums,” the report’s findings showed that, after adjusting for workers who incorrectly classified themselves as “unemployed bums,” the report’s findings showed that Investors have been focusing on jobs because, despite signs that inflation is picking up in the aftermath of the pandemic, the jobs recovery hasn’t given market participants much confidence. The number of people quitting their jobs has lately reached an all-time high. There has also been a surge in retirements among the elderly who do not want to jeopardize their health. Although the labor report was strong, Jefferies economists Aneta Markowska and Thomas Simons wrote that it is “still short of the 1 million pace that was viewed as the base case just a few months ago.” However, Jefferies economists expect to reach around 1 million jobs per month by July, “given the expiration of unemployment benefits in 25 states and very favorable seasonals.” Factory orders rose 1.7 percent in May, up from a revised 0.1 percent loss the month before, according to the Commerce Department, which was somewhat better than anticipated. In 12 of the last 13 months, factory orders have increased. Meanwhile, the oil market was in the spotlight on Friday as the Organization of Petroleum Exporting Countries (OPEC) and Russia—members of the group known as OPEC+—delayed a decision on whether or not to ease output limitations in place to assist stabilize crude prices. The oil decision comes as the group grapples with the COVID pandemic’s long-term effects on energy demand, as well as concerns about the impact of coronavirus variants in some parts of the world, as well as expectations for higher demand as many economies emerge from lockdowns and stay-at-home protocols imposed to contain the pandemic’s spread. Investors may also be watching talks surrounding the United States’ debt ceiling, since reports suggest Congress has no plans to raise it.Which companies are being scrutinized?
International Business Machines Corporation (IBM) is a multinational corporation that manufactures business machines
IBM,
minus 4.73 percent
President Jim Whitehurst is stepping down after three years at the helm of the software behemoth, after Chief Executive Officer Arvind Krishna’s takeover last year. RedHat was acquired by IBM two years ago, and Whitehurst was the former CEO. The stock was down 4.4 percent.
The Federal Aviation Administration said in a statement that a Boeing cargo jet made an emergency landing in the Pacific Ocean off the coast of Hawaii early Friday and that both individuals on board were rescued. The company’s stock was down 0.7 percent.
Didi Global Inc., a Chinese ride-hailing company, is trading at a loss. DIDI plummeted 7.7% after China’s internet regulator announced it is looking into the company’s cybersecurity threats, according to Dow Jones Newswires.
Tesla Inc. is a California-based electric vehicle manufacturer. TSLA reported Friday that it built 206,421 vehicles and delivered 201,250, falling short of FactSet’s forecast of 207,000 vehicle sales. The stock was up 0.4 percent.
Virgin Galactic’s stock
SPCE,
4.35 percent increase
were up 5.7 percent after the space tourism company announced that one of its founders, Sir Richard Branson, will be going into space.
Krispy Kreme (Krispy Kreme) Inc. (Krispy Kreme) Inc. (K
DNUT,
minus 8.53 percent
were down 9% after the company posted a 24 percent gain on its first trading day.
Robinhood Markets is a brokerage firm.
HOOD,
announced its intention to list under the ticker “HOOD” on the Nasdaq Inc. platform.
What about your other assets? How are they doing?
The 10-year Treasury note yield TMUBMUSD10Y fell 1.7 basis points to 1.438 percent. The yield curve and the price of debt move in opposite directions.
The ICE U.S. Dollar Index DXY, which compares the currency to a basket of six major rivals, fell 0.3 percent.
As investors awaited OPEC+’s delayed decision on whether to increase output beginning next month, the US oil benchmark CL00 was trading about 0.1 percent lower at $75.18 a barrel. Gold futures GCQ21 were trading at $1,784.40 an ounce, up 0.4 percent, on their way to their highest close since June 16.
The Stoxx 600 Europe SXXP closed 0.3 percent higher, marking a 0.2 percent weekly fall, while London’s FTSE 100 UKX slipped less than 0.1 percent, marking a 0.2 percent weekly decline.
In Asia, the Shanghai Composite SHCOMP fell 2% on the day and was down 2.5 percent for the week, while Japan’s Nikkei 225 NIK climbed 0.3 percent on the day but was down 1% for the week./n
Read More
