8:50 a.m. The Dow Jones Industrial Average is soaring after the U.S. added jobs in May, while the unemployment rate, though higher, fell far short of dire expectations.
Dow futures have 636 points, or 2.4%, while S&P 500 futures have risen 1.%, and Nasdaq Composite futures have advanced 0.2%.
The U.S. was supposed to lose 11 million jobs in May. Instead it added 2.5 million jobs. The unemployment rate, which was supposed to hit nearly 20%, rose to 13.3%. That’s high, but not nearly as bad as it could have been. “Talk about a surprising number,” writes NatAlliance Securities’ Andrew Brenner. “Clearly these were not numbers the markets were expecting.”
It wasn’t just the stock market that shot higher. The 10-year bond yield has gained 0.094 percentage point to 0.914%, and that should give bank stocks boost.
The only downside—and how can there really be one when the U.S. actually added jobs in May?—is that a strong recovery might mean the Fed will pull back from supporting the market. But even that might not be likely, at least not right now. “At the end of the day, [unemployment rate] at 13% with negative wage growth means the Fed has to keep going,” writes Evercore ISI’s Dennis DeBusschere.
Forget the market for now, though. This is wonderful, wonderful news.
Write to Ben Levisohn at Ben.Levisohn@barrons.com
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June 05, 2020 at 11:08PM
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Dow Jones Industrial Average Soars Because Jobs Numbers Were Wonderful - Barron's
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