S&P 500 hits record high after strong July jobs report

Shares were mixed on Friday on the heels of a key labor market report, which reflected a stronger-than-expected employment rebound last month and a sharp drop in the unemployment rate.

The S&P 500 hit a record intraday high, building on a record close a day earlier. The Dow Jones added more than 100 points, or 0.3%. The Nasdaq plunged as Treasury yields rose across the curve after the better-than-expected rally in the labor market.

For investors, all eyes on Friday were on the Labor Department’s July jobs report. The print showed that a whopping 943,000 jobs returned last month as the unemployment rate fell to its lowest level since March 2020. The report also showed upward revisions to wage bill gains for workers. last two months.

But with the Delta variant plaguing the United States and other labor market constraints still at play, many experts have suggested that the economy is still not entirely clear. Earlier this week, ADP’s closely watched impression of private wages was a big disappointment, with just 330,000 jobs returning against nearly 700,000 expected. While the ADP report has historically not perfectly followed the Ministry of Labor’s “official” monthly employment reports, it has tended to be a good directional indicator of labor market trends.

And for equity investors, some moderation in the pace of the recovery may be seen as the most desirable outcome.

“The market actually wants a bad jobs report, as perverse as it sounds,” Opimas CEO Octavio Marenzi told Yahoo Finance on Thursday afternoon, adding that he wanted ” jobs are low so that the Fed has a reason to continue its monetary policy. ”

Namely, the Federal Reserve has suggested that it looks for further progress in the economic recovery before announcing or implementing any changes to its very accommodative policies. Earlier this week, Federal Reserve Governor Christopher Waller said that he would support the announcement of a reduction in crisis-time central bank bond purchases by September if the two couples’ next employment report goes into effect. Also, Federal Reserve Vice Chairman Richard Clarida said he would support an interest rate hike in 2023 if the economic recovery continues on its current path.

Other economists have suggested this month’s jobs report would only be a retrospective indicator given the deceleration in growth resulting from the latest wave of virus problems.

“July is a bad seasonal time for employment in states and local communities at the end of the school year, but as layoffs have been loaded upstream, it is possible that the seasonal factor is contributing disproportionately to this. public sector employment field, ”Neil Dutta, director of macro research at Renaissance Macro Research, wrote in an email Thursday. “I think the larger story is that even if July is strong, it won’t matter because no one should expect a repeat of performance in August with a drop in economic confidence due to the ‘increased hospitalizations for COVID in parts of the country. ”

10:52 am ET: The “No. 1 concern on investors’ minds right now: Wells Fargo strategist

Investors weighed their optimism about a pickup in economic activity against fears that the economy would get too hot in the near term. According to a number of strategists, this showdown will continue to be the main concern of investors.

“People are concerned about inflation and when do the breaks end up going up,” Ann Miletti, head of active stocks for Wells Fargo Asset Management, told Yahoo Finance. “This is probably the number one concern in the minds of investors: Has the market gone too far? How much does the market cost? And where else can we put the money to work? “

“As an investor in equities, I think there is still room for investors to stay,” she added. “They have to stay somewhat in equities just because there is no other room to really earn good returns. And the economy is still strong, there is still room to grow here. ”

“The concern is really about 2022. We know that growth will slow,” Miller said. “And I think the factors are there, what’s going on with the regulatory and political environment for 2022. That’s where the concerns mostly lie for me. But there is definitely room for the market.”

9:30 a.m. ET: S&P 500 hits intraday high, Dow wins after jobs report

Here’s where the markets started the trading day on Friday:

  • S&P 500 (^ GSPC): + 8.49 (+ 0.19%) to 4,437.59

  • Dow (^ DJI): +151.48 (+ 0.43%) to 35 215.73

  • Nasdaq (^ IXIC): -24.06 (-0.16%) to 14,871.17

  • Raw (CL = F): + $ 0.50 (+ 0.72%) to $ 69.59 per barrel

  • Gold (CG = F):-$ 35.60 (-1.97%) to $ 1,773.30 per ounce

  • 10-year cash flow (^ TNX): + 6.8 bps for a yield of 1.285%

9:15 a.m. ET: Job growth exceeds earlier estimates in July, with unemployment rate at lowest since March 2020

U.S. employers created more jobs than expected in July as larger company reopenings helped fuel hiring.

Non-farm payrolls increased by 943,000 last month, beating estimates of around 870,000, according to Bloomberg data. Employment gains for May and June were also revised upwards by a total of 119,000. Employers in the leisure and hospitality industries were major contributors to the growth, with these industries adding 380,000 last month.

The unemployment rate also improved more than expected to 5.4%, from 5.9% in June. Consensus economists were looking for a 5.7% footprint.

Average hourly earnings have risen more than expected, both month-on-month and year-on-year as employers try to attract workers due to widespread labor shortages. Average hourly wages increased 0.4% in July from June and 4.0% from the same month last year.

7:11 a.m. ET Friday: Trading in equity futures is mixed

Here’s where the markets were trading on Friday morning:

  • S&P 500 Futures Contracts (ES = F): +1.75 point (+ 0.04%) to 4,423.25

  • Dow Futures (YM = F): +25 points (+ 0.07%) at 34,968.00

  • Nasdaq Futures (NQ = F): -17.75 points (-0.12%) to 15,150.00

  • Raw (CL = F): + $ 0.99 (+ 1.3%) to $ 69.99 per barrel

  • Gold (CG = F):-$ 12.50 (-0.69%) to $ 1,796.40 per ounce

  • 10-year cash flow (^ TNX): +4.1 bps for a yield of 1.258%

6:10 p.m. ET Thursday: Stock futures line up flat line ahead of jobs report

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

  • S&P 500 Futures Contracts (ES = F): -1.75 point (-0.04%) to 4,419.75

  • Dow Futures (YM = F): -19 points (-0.05%) to 34,924.00

  • Nasdaq Futures (NQ = F): -2 points (-0.01%) to 15,165.75

Traders gather at a post on the floor of the New York Stock Exchange on Tuesday, August 3, 2021. Stocks got off to a mixed start on Wall Street as traders weigh in another large set of corporate earnings reports, which have been widely disseminated. ahead of analysts’ forecasts. (AP Photo / Richard Drew)

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

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