Yahoo Finanza US Stock Market Overview – Stock Rally Led by Energy; the Nasdaq Hits Fresh Highs
US stocks continued to rally on Monday led by energy shares despite a pullback in oil prices. The Dow Industrials continued to outperform as investors rotated into value stocks and out of growth. Most sectors in the S&P 500 index were higher, led by Energy and Real-estate. Materials were the worst-performing sector in the good tape. The Nasdaq hit a fresh intraday all-time high recovering all of the losses seen in March and April. Beyond meat surged higher, following news that the company secured a distribution deal with a Chinese company.
The VIX volatility index continued to hover above the 200-day moving average, which will be a psychological win for the markets if the average does not hold. The stronger than expected jobs report was someone offset by the potential for an increase in the unemployment rate when furloughed workers are counted.
Issues with Unemployment Rate
The strong jobs number if sustained, could be a real impetus for accelerating growth as the improved data is telling us that the US economy is responding to the unprecedented fiscal and monetary stimulus. This is even before the reopening of big states. New York City provides 5% of US economic growth.
The non-farm payroll report showed a surprise increase in the number of jobs created. The U.S. leisure and hospitality industry, posted an eye-popping rebound in May with a net addition of more than 1.2 million jobs, by far the largest one-month increase in the sector’s history. While the number of payrolls was fantastic, there was a concern with the calculation on the unemployment rate. Currently, the Labor Department has not counted temporarily laid-off workers who believe they are going back to work. These furloughed workers if counted would bring the unemployment rate to 20% from the current reading of 13%.
This article was originally posted on FX Empire
