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Profit from the Pros By Kevin Matras Executive Vice President
Stocks Put In Another Record Day Yesterday Ahead Of This Morning's Jobs Report
Image: Bigstock
Stocks finished higher again yesterday with the S&P making another new recovery high, and the Nasdaq making another new all-time high. (This is the fourth time I've said that this week. And I love it!)
This now makes it 5 up days in a row for the Dow, 5 up days in a row for the S&P, and 7 up days in a row for the Nasdaq.
Same story. Earnings season continues to lift stocks.
Same for the better than expected economic reports. We've gotten a parade of better than expected reports this week, not to mention over the last few months. That was on display again yesterday with a better than expected Weekly Jobless Claims report which showed 1.186 million new claims vs. last month's 1.435 mil. and views for 1.442 mil.
But the jobs report everybody will be focused on today is this morning's Employment Situation Report.
You'll remember, the last two reports have been blockbusters with last month's Employment Report showing we gained 4.8 million jobs vs. expectations for 'just' 3.0 million jobs; and that came on the heels of the previous month's Employment Report which showed 2.7 million jobs were gained vs. expectations for -7.7 million jobs lost.
The consensus for this morning is 2.0 million jobs gained, with the unemployment rate ticking down from 11.1% to 10.5%.
There's some concern that the jobs numbers could be soft given Wednesday's lighter than expected ADP Employment Report which estimated just 167,000 new jobs were created last month vs. expectations for 1.888 million. But those familiar with the ADP report also know that their numbers can be markedly different than the official jobs numbers, and they often are.
Nonetheless, with the economic reopening hitting some snags in some places, it's not out of the question.
But with the ADP report prepping people for a potential miss, would it really be a shock if we came in a bit lighter? Plus, we all know any weakness is likely just temporary. Because as the economy expands its reopening, job gains will continue to grow. And so will the economic demand.
That's why analysts are calling for unprecedented growth for the remainder of the year.
Either way, we'll see what the jobs numbers look like at 8:30 AM ET.
Traders will also be watching the news on the fate of the fourth coronavirus relief/stimulus package. There's still optimism that a deal is coming. But, absent a deal, the President has said he's prepared to offer aid through an executive order.
In the meantime, stocks continue on their record-setting pace.
And if all goes well today, that winning streak will be extended even further.
Best,
Kevin Matras
Executive Vice President, Zacks Investment Research
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