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Stocks Up For The Week, Nasdaq Makes Another New All-Time High
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Stocks closed up on Thursday, and up for the week, after another better than expected jobs report.
Expectations were already running high leading up to the report, and it didn't disappoint.
On Thursday morning, the Employment Situation Report showed another 4.8 million jobs were created (4.767 million in the private sector and 33K in the public) vs. expectations for 'just' 3.0 million (2.660M private and 340K public), while the unemployment rate fell to 11.1% vs. last month's 13.3% and views for 12.4%.
And that comes on the heels of last month's blowout Employment Report which showed 2.7 million jobs were gained vs. expectations for -7.7 million jobs lost.
Wow!
This is why the market has been soaring.
The economy is bouncing back bigger and faster than many had expected.
But it really shouldn't have been such a surprise.
We all knew once the pullback was over that a new bull market was inevitable. History has proven that.
And since the quick recession we just experienced wasn't due to the typical boom/bust cycle that usually takes time to recover from, but rather a temporary suppression of economic activity due to the lockdown, the economy and market, now that we're opening back up, are snapping back in record fashion.
Remember, just a few short months ago, prior to the outbreak, the U.S. economy was considered to be the strongest of our lifetime with 50-year low unemployment, 20-year high in household income, near record high consumer confidence, and record high corporate profits.
And that structure, even though it was put thru the wringer, is still in place.
Let's also not forget the nearly $10 trillion in fiscal and monetary stimulus that has been pumped into the economy, not to mention talk of another $1.5 trillion stimulus bill likely to be passed by month's end.
And that's on top of the Fed slashing interest rates to near zero. And it doesn't look like those are going to go up anytime soon.
That's why top analysts are expecting Q3 GDP to rise by a record 20%, with another double-digit gain in Q4.
And for all of 2021, the annual GDP is expected to grow by 5%, which would be the largest annual GDP growth rate in 38 years!
Concerns over the rise in coronavirus cases are legit. And that has forced some cities and states to slow down their reopening plans and impose new restrictions to get it under control.
The next few weeks will be crucial to see how this plays out.
In the meantime, the economic reopening continues (bumps and all), the pent-up economic demand being unleashed is huge, and it looks like there's a lot more upside to go.
So make sure you're taking full advantage of it.
See you tomorrow,
Kevin Matras
Executive Vice President, Zacks Investment Research
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