The stock market looked past the pandemic and nationwide protests, moving higher on surprisingly optimistic employment news. I have chosen to break down this week’s market news using lyrics from Bob Dylan’s Times They Are A Changin’.
For the loser now will be later to win
For the last two months the rally has been predominantly in a handful of stocks that changed this week as we’re beginning to see broader participation in the market rally. As the industries that have been crushed by the pandemic: airlines, cruise ships and retail companies finally saw their stocks rally.
Don’t speak too soon for the wheel’s still in spin
The jobs report on Friday showed the economy added jobs in May, most economists expected a staggering number of job losses, so the fact that we added 2.5 million jobs in May caused euphoria in the market. Markets are pricing in a quicker return to normal. A deeper dive into the numbers shows that more of a mixed economic result. While the unemployment rate dropped from April, May’s 13.3% unemployment rate is still historically high—well above the 10% reached at the height of the 2008 financial crisis. Furthermore, claims for continuing unemployment benefits increased to 21.5 million last week, a sign that the pace of hiring is still well below normal.
Better start swimmin’ or you’ll sink like a stone
European central banks and governments have been slow to take the large scale fiscal and monetary policy action that we have done here in the US. That changed this week as both the European Central Bank and the German government expanded stimulus measures showing a willingness to go beyond traditional comfort zones to bolster their economies.
I am here to help at any time. If you would like to schedule a phone appointment. I have included a link to my calendar below and you can self schedule. For those of you who prefer an in person meeting I am hoping to begin having face to face again starting the week of June 22nd.
https://calendly.com/laurel-ws
