US Stocks Float at Records Boosted by Strong Jobs Report
05 Jul 2021 · 3rd Party Analysis
- US stocks seal fresh record on Friday as traders prepare for a four-day trading week
- Upbeat jobs data confirms the economic recovery remains on track
Wall Street equities resumed their strong performance on Friday when the jobs report gave another boost and propelled the major indexes to new records. Following a better-than-expected monthly employment report, the S&P500 and the Nasdaq Composite surged to fresh all-time highs, extending their rallies to seven days, and six days, respectively.
Friday’s rally lifted the broad-based S&P500 higher by 32.40 points, or 0.75%, to a close of 4,352.34. The technology-heavy Nasdaq Composite soared 116.95 points, or 0.81%, to finish the session at 14,639.33. The Dow Jones Industrial Average advanced 152.82 points, or 0.44%, to 34,786.35.
Technology stocks were at the forefront of the rally. Amazon, Microsoft, and Google’s Alphabet, all advanced more than 2% apiece, while Apple gained 1.96%.
Friday’s jobs report added to the string of good news that has sustained the market upside in recent months. Employers added 850,000 new job positions last month, beating expectations and topping the previous number of 583,000.
Investors read the report as another strong evidence that the economic recovery remains intact and moving forward. Market participants also used the number to ease their concerns that the Fed may be prompted to tighten its fiscal stimulus as the central bank’s projections are so far been realized.
Investors Shift Their Positions
The latest jobs number is the biggest gain in 10 months. Despite the climb, the unemployment rate rose to 5.9% from 5.8% in May. While the stronger-than-expected payroll report signaled a continued recovery, the rise in unemployment suggested some slack in the market. Still, the “goldilocks” number, not too hot, and not too cold, will most likely convince the Federal Reserve to maintain its current monetary policy.
Today, US markets are closed for Independence Day. The holiday week, shortened to four trading days, is bringing an important event on Wednesday. The markets will be anticipating the release of the FOMC minutes from the last meeting between Fed officials. During its mid-June discussions, the Federal Open Market Committee decided to perform at least two interest rates by 2023, a year earlier than planned.
The announcement left investors scrambling and trying to shift their positions to accommodate the expected higher interest rates. The report that will be released on Wednesday is expected to provide more clarity and insights on the discussed topics at the Federal Reserve.
European markets today opened relatively flat after Friday brought mixed results to bourses in the old continent. The broad-based Stoxx Europe 600 is trading unchanged, hovering near the flatline.
Over to cryptocurrency, bitcoin and its peers today are pointing to the downside after a solid weekend of gains. Over the past couple of days, the largest digital currency added nearly 8% to its value and climbed to a high of $35,600. In the early hours of Monday’s trading, the asset reached a weekly high of $35,900 but then declined to the current market price of $34,200. Ether advanced 12% over the weekend and this
morning it reached a three-week high of nearly $2,400 per coin. The Ethereum token is now trading around $2,300, lower by roughly 3% on the day.