THE WEEK ON WALL STREET
Overcoming jitters about the Delta variant and the reintroduction of mask
requirements, stocks climbed higher on strong employment data and a fresh batch
of strong corporate earnings. The Dow Jones Industrial Average rose 0.78% while
the Standard & Poor’s 500 advanced 0.94%. The Nasdaq Composite index gained
1.11% for the week. The MSCI EAFE index, which tracks developed overseas stock
markets, picked up 1.61%.
The crosscurrents of strong corporate profits and the rise in Delta variant infections
led to a roller coaster week of price action, as markets alternated between daily gains
and losses. By Thursday, however, investors appeared to grow more optimistic that
the economic reopening was not under serious threat when back-to-back
employment reports suggested that the economic recovery remained on track. A
favorable initial jobless claims report was enough to send the S&P 500 and Nasdaq
to new all-time highs. Thanks to Friday’s stronger-than-expected employment
report, the S&P 500 managed to add to its previous record close, while the Dow
Jones Industrial Average set its own record high. The more tech-centric Nasdaq,
however, slipped off its highs.
Last week reinforced the idea of an improving labor market. After a disappointing
ADP (Automated Data Processing) National Employment Report that showed a
slowdown in private-sector hiring, with just 330,000 new jobs added, subsequent
employment data were much more encouraging. Thursday’s report of a modest drop
in initial jobless claims to 385,000 and a more substantial drop of 366,000 in
continuing claims was followed by a solid employment report on Friday, which
showed employers had added 943,000 new jobs in July—the biggest jump since
August 2020. This hiring increase shaved the unemployment rate to 5.4%, down
from June’s 5.9% rate. The "extra" unemployment benefits are set to sunset in
September. I hope those who are hanging onto the extra free money rather than
getting back to work aren't in for a rude awakening when there's a mad dash to get
a real job next month. It is sad when Burger King is offering a $1,000 sign on bonus.
Thank big government for that.
Monday: JOLTS (Job Openings and Labor Turnover Survey).
Wednesday: Consumer Price Index.
Thursday: Jobless Claims.
Friday: Consumer Sentiment.
Monday: Air Products and Chemicals, Inc. (APD), Tyson Foods, Inc. (TSN).
Tuesday: Sysco Corporation (SYY), Coinbase Global, Inc. (COIN).
Wednesday: Nio, Inc. (NIO), eBay, Inc. (EBAY).
Thursday: The Walt Disney Company (DIS), Baidu, Inc. (BIDU), Doordash, Inc.
DASH), Airbnb, Inc. (ABNB).
peaking this week or next and may have peaked in Florida last week. This is based
on the forecast of data scientists using math and not fear. There are lots of earnings
reports continuing to come out. A few of the epicenter type companies like Disney
and Airbnb are reporting this week and it will be interesting to hear what they have
to say. Stay tuned…
THIS WEEK'S UPDATE
August 09, 2021|