Stock Futures Rise as Investors See Mixed Jobs Report in May

Shares rose on Friday as investors digested a mixed report on the state of the US labor market, with a back-to-back failure on monthly payroll gains serving as potential fuel for policymakers to keep their current support systems in place. Longer.

The top three indexes, which traded in a mixed fashion earlier in the morning, rose following the Labor Department’s employment report in May. The non-farm payroll rose by 559,000, which accelerated from April but still missed estimates of an increase of 650,000. While the unemployment rate fell to a new low of l pandemic era of 5.9%, this was accompanied by a drop in the labor force participation rate, suggesting that a smaller proportion of unemployed Americans returned to the labor market to seek or take a new job.

Investors may interpret the consecutive failure of job gains as a sign that the economy has not yet recovered enough to warrant a pivot in the Federal Reserve’s ultra-accommodative monetary policy.

“What I see here is sort of a global ‘Goldilocks’ economy. I see employment increasing,” the former said Chase Chief Economist Anthony Chan told Yahoo Finance Friday. “As for why the market is excited, it’s because it’s telling us that the economy isn’t hot, that it’s actually going to open up pretty gradually. is important.”

Still, the economic data overall has been mixed. A stronger-than-expected ADP private payroll report and weekly jobless claims printed on Thursday each highlighted firming rehiring trends in the economy, with a smaller proportion of people becoming new unemployed due to job-related reasons. pandemic. Another wave of vaccinations has taken place, reopenings have resumed, and companies have struggled to bring back workers to keep pace with growing demand.

“We are now entering the booming city. We are on the verge of moving from recovery to expansion of the economy,” RSM chief economist Joseph Brusuelas told Yahoo Finance. “I think it’s appropriate, members of the Federal Reserve are starting to signal to markets that things won’t be the same forever, that it’s appropriate that they start thinking about slowing the pace of buying. at the very least, or to change the composition of those asset purchases.

“It makes sense that later this summer, maybe as early as Jackson Hole, or at the September meeting, we would get a more definitive overview from the central bank on the end of these asset purchases,” he said. he adds.

Still, some Federal Reserve officials have suggested they are still inclined to stay on hold. New York Federal Reserve Chairman John Williams told Yahoo Finance’s Brian Cheung on Thursday that the economy was “still a long way from sustaining the substantial progress we are really looking for in terms of adjustments to our purchasing program. of assets “. However, earlier this week, Philadelphia Fed Bank Chairman Patrick Harker took a different stance, saying “Maybe it’s time to at least think about the unraveling.”

Meanwhile, the latest stock rally last week took a break on Friday, with AMC Entertainment (AMC) shares slipping for another day after doubling on Wednesday. Shares of other heavily shorted stocks popular with traders on Reddit, including BlackBerry (BB) and Naked Brand Group (NAKD), also traded with relatively less volatility. Still, many experts have suggested that the high participation of retail traders and social media driven stock trading is here to stay.

“Reddit is not dead and the theme of stocks itself is not dead, and there is a powerful large audience that can still push these stocks a little bit,” Jim Bianco, president of Bianco Research, told Yahoo Finance. “It looks like we’re now starting to get to the point where the broader market is starting to notice it again, as it did in late January. And if we continued to see meme stocks continue to drop, maybe a larger systemic problem will become a worry, not a problem, but will also become a worry as it was in January. ”

“I think we’re going to have to settle in and realize that this is just the investment environment we have now in 2021,” he added.

9:33 am ET: Stocks open higher after mixed jobs report

All three major indexes opened the session higher on Friday morning, with investors viewing May’s jobs report as a sign the economy may not be overheating as feared.

The Dow Jones added more than 100 points, or 0.4%, after the opening bell. The Nasdaq outperformed with a gain of 0.7%, as tech stocks advanced as US Treasury yields fell, optimistic that mixed economic data would keep interest rate ceilings high during the recovery. The S&P 500 added 0.5%.

8:52 a.m. ET: Payroll gains disappoint again in May, as unemployment rate hits lowest since March 2020

The US economy created more than half a million additional jobs in May, with employment picking up from April but estimates still missing even as the unemployment rate fell to a new low of the pandemic era.

Non-farm payrolls increased by 559,000, according to the Labor Department, missing Wall Street estimates for an increase of 675,000, based on Bloomberg data. This follows an increase of 278,000 jobs in April, which was revised up slightly from the 266,000 previously reported. In total, the US economy is still short of more than 7 million jobs at its pre-pandemic levels in February 2020.

The unemployment rate fell to 5.8% from 6.1% in April. Meanwhile, average hourly earnings accelerated to a 0.5% month-over-month clip and a 2.0% year-over-year increase.

7:23 a.m. ET Friday: Stock futures trade sideways ahead of jobs report

Here’s where the markets were trading ahead of the opening bell on Friday morning:

  • S&P 500 Futures Contracts (ES = F): 4,193.50, +2.25 points (+ 0.05%)

  • Dow Futures (YM = F): 34,542.00, -25 points (-0.07%)

  • Nasdaq Futures (NQ = F): 13,547.50, +18.25 points (+ 0.13%)

  • Gross (CL = F): + $ 0.19 (+ 0.28%) to $ 69.00 per barrel

  • Gold (CG = F): -0.30 $ (-0.02%) to $ 1,873.00 per ounce

  • 10-year cash flow (^ TNX): -0.2 bps for a yield of 1.6250%

6:16 p.m. ET Thursday: Stock futures rise ahead of May jobs report

Here’s where the markets were trading on Thursday night:

  • S&P 500 Futures Contracts (ES = F): 4 2192.5, +1.25 point (+ 0.03%)

  • Dow Futures (YM = F): 34,586.00, +19 points (+ 0.05%)

  • Nasdaq Futures (NQ = F): 13,535.00, +5.75 points (+ 0.04%)

NEW YORK, NY – JUNE 02: Exterior view of the New York Stock Exchange and Wall St. as a new Organon company start trading next Thursday in New York on June 02, 2021. Organon is looking to expand to provide treatment for other conditions unique to women, around 80% of the new company’s income will come from outside the United States (Photo by Kena Betancur / VIEWpress)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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