Stocks Climb After Tepid Jobs Report But Meme Stock Frenzy Cools

0
125

Top line

Shares rose on Friday as traders assessed a somewhat disappointing job report released in May that suggested the Federal Reserve may shortly be more reluctant to tighten ultra-light monetary policy anytime soon, while Bitcoin and most other cryptocurrencies fell moderately.

Photo: STRF / STAR MAX / IPx 2021 04/14/21 Atmosphere in and around the New York Stock Exchange.

STRF / STAR MAX / IPx

Important facts

On Friday, the S&P 500 was up 0.88%, the Dow Jones Industrial Average was up 0.52%, and the Nasdaq was up 1.47%.

For the week, the S&P 500 was up 0.61%, the Dow was up 0.66% and the Nasdaq was up 0.48%.

Reddit investors’ latest meme stock favorite, AMC Entertainment, ended an extremely volatile week down 6.6% on Friday, but rose 83.4% for the week and rose 2159 for the year to date %.

Electronic signature company DocuSign stocks rose 19.76% after posting a smaller loss on 58% higher revenue in the first quarter.

Biopharmaceutical company Biogen rose 4.99% on Friday before a decision on its Alzheimer’s drug aducanumab was expected by the Food and Drug Administration on Monday.

The Labor Department said Friday that the U.S. economy created 559,000 jobs in May, which is below expectations but more than double the previous month, while the unemployment rate rose from 6.1% in April to 5.8% has sunk.

tangent

Bitcoin fell 4.55% in the last 24 hours through 4pm Friday, the day after Elon Musk posted a tweet suggesting that it was “parting” with the world’s largest cryptocurrency. Bitcoin is still up 27.3% year-to-date and has a market cap of nearly $ 696 million.

Key background

Thomas Simons, an economist at Jeffries, wrote in a note that May salary data was “a little weaker” than consensus expectations of 675,000. “In the context of last month’s failure, the numbers are not bad today, but they are still pretty modest compared to the strength of other economic growth indicators,” he wrote. “The data is consistent with other indicators of a previously well-understood labor shortage that should ease somewhat as the expanded unemployment benefit programs expire all summer.” Mark Hamrick, senior economic analyst at Bankrate, commented that the Federal Reserve would increase the Interest rates should feel “a little less urgent” as the rise in payrolls was “a little subdued”. Meanwhile, the ongoing volatility in meme stocks like AMC has worried some analysts. Matt Maley, senior market strategist at Miller Tabak, told CNBC on Friday, “Some of these stocks that are trading well beyond their fundamentals I think are going to be really tough,” added that what is happening now “just easy” is not healthy. “David Trainer, CEO of New Constructs, an investment research firm, said earlier this week that there was” no fundamental reason “to buy shares in AMC because the company was” weak ” Profits ”trades at a level that is“ completely decoupled ”from fundamentals and“ mountain of debt ”.

Big number

385,000. That is how many people applied for unemployment insurance in the week of May 29, according to the Ministry of Labor, 20,000 fewer than in the previous week, which marks a pandemic low.

Against

Facebook shares rose 1.3% on Friday after former President Donald Trump was banned from the social media platform for at least two years.

What to look out for

Mike Fratantoni, chief economist for the Mortgage Bankers Association, said in a statement Friday that the decline in initial unemployment insurance claims in recent weeks, continued “robust demand” for labor, as the high job vacancies indicate, suggests “more recruitment” above the summer. He expects the unemployment rate to fall to 4.5% by the end of the year.

further reading

Why the Nasdaq Stock Market is a Hot Spot Now (Forbes)

Here’s Why Experts Believe The Stock Market Could Go Higher If Stocks Test New Highs (Forbes)

Stock market outlook May 2021 (Forbes)