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Stocks rally on surprisingly positive employment report
05-Jun-20 16:20 ET
Dow +829.16 at 27110.98, Nasdaq +198.27 at 9814.11, S&P +81.58 at 3193.80

https://www.briefing.com/stock-market-update

[BRIEFING.COM] U.S. stocks rallied to end a strong week after the May employment report showcased an unexpected increase in payrolls. The S&P 500 rose 2.6%, and the Nasdaq Composite rose 2.1%, setting a new intraday high in the process. The Dow Jones Industrial Average (+3.2%) and Russell 2000 (+3.8%) outperformed again.

Consensus estimates were projecting millions more in job losses in May. Instead, nonfarm payrolls increased by 2.509 million (Briefing.com consensus -8.50 million), and private sector payrolls increased by 3.094 million (Briefing.com consensus -8.8 million). The unemployment rate even ticked lower to 13.3% (Briefing.com consensus 19.9%) from 14.7% in April.

The stock market was already on track for a higher start prior to the report's release, but equity index futures shot higher immediately after the release as the data suggested a recovery was occurring quicker than anticipated. After the open, it was a relatively smooth advance throughout the day.

The S&P 500 energy (+7.5%), financials (+3.9%), and industrials (+3.7%) sectors posted solid gains that lifted each sector above 10% for the week. All sectors finished higher today, but the utilities (+1.4%) and consumer staples (+1.5%) sectors struggled to keep pace with the benchmark index.

Investors continued to pile into value-oriented stocks like Boeing (BA 205.43, +21.13, +11.5%), which rose 41% this week, but also bought heavyweight favorites like Apple (AAPL 331.50, +9.18, +2.9%), which set a new all-time high today.

The continued rise in oil prices ($39.50, +2.08, +5.6%) ahead of an OPEC+ meeting this weekend continued to attract buyers into the energy sector. In the semiconductor space, Broadcom (AVGO 317.08, +8.19, +2.7%) satisfied investors with its earnings report and in-line guidance. The Philadelphia Semiconductor Index (+2.6%) closed at a record high.

U.S. Treasuries ended the session with losses, especially on the longer-end of the curve. The 2-yr yield increased two basis points to 0.21%, while the 10-yr yield increased eight basis points to 0.90% -- its highest level since March 20. The U.S. Dollar Index increased 0.3% to 97.00.

Reviewing Friday's economic data, which featured the Employment Situation Report for May:

May nonfarm payrolls increased by 2.509 million (Briefing.com consensus -8.50 million). May private sector payrolls increased by 3.094 million (Briefing.com consensus -8.8 million). May unemployment rate was 13.3% (Briefing.com consensus 19.9%), versus 14.7% in April.
The key takeaway from the report is that the surprising increase in nonfarm payrolls and nonfarm private payrolls reflects an economy getting back to work even sooner than the market itself was anticipating, which is why equity index futures shot higher and bond prices shot lower immediately following the release.
Consumer credit contracted by $68.7 billion in April (Briefing.com consensus -$42.0 billion) after declining an upwardly revised $6.9 bln (from -$12.1 billion) in March.
The key takeaway from the report is that it shows how banks and finance companies grew more restrictive in extending credit to individuals in April as job losses, and concerns about repayment capabilities, mounted.

Investors will not receive any notable economic data on Monday.

Nasdaq Composite +9.4% YTD
S&P 500 -1.1% YTD
Dow Jones Industrial Average -5.0% YTD
Russell 2000 -9.7% YTD

Market Snapshot
Dow 27110.98 +829.16 (3.15%)
Nasdaq 9814.11 +198.27 (2.06%)
SP 500 3193.80 +81.58 (2.62%)
10-yr Note -28/32 0.888
NYSE Adv 2488 Dec 439 Vol 1.5 bln
Nasdaq Adv 2503 Dec 802 Vol 6.5 bln

Industry Watch
Strong: Energy, Financials, Industrials, Real Estate
Weak: Consumer Staples, Utilities

Moving the Market

-- Stocks rally after surprisingly positive employment report for May, Nasdaq sets new intraday high

-- May nonfarm payrolls increased by 2.509 million (Briefing.com consensus -8.50 million), unemployment rate ticks lower to 13.3% (Briefing.com consensus 19.9%) from 14.7% in April.

-- Broad-based advance led by the cyclical sectors

-- 10-yr yield (0.90%) rises to March levels

WTI crude rises more than 5% ahead of OPEC+ meeting
05-Jun-20 15:30 ET
Dow +870.58 at 27152.40, Nasdaq +216.88 at 9832.72, S&P +87.50 at 3199.72

[BRIEFING.COM] The S&P 500 is up 2.8% and on pace to end the week higher by 5.1%.

One last look into the S&P 500 sector standings shows energy (+7.0%) setting the performance pace with a 7.0% gain. The financials (+4.0%) and industrials (+3.8%) sectors follow suit, while the consumer staples sector (+1.7%) underperforms.

WTI crude futures settled the session higher by $2.08 (+5.6%) to $39.50/bbl ahead of the OPEC+ production cut meeting on Saturday.