Major indices erase the week’s declines. Now up on the week.

The major US indices are closing near session highs and also have erased the declines for the week. The two day losing streak to start the week was also snapped with the strong gains today.

Looking at the closing levels:

  • Dow industrial average is up 434.79 points or 1.33% at 33248.03
  • S&P index is closing up 75.64 points or 1.84% at 4176.88
  • NASDAQ index is closing up 322.44 points or 2.69% at 12316.90
  • Russell 2000 is up 42.84 points or 2.31% at 1897.67

On Friday last week, the closing levels showed:

  • Dow industrial average 33212.97
  • S&P index 4158.23
  • NASDAQ index 12131.13
  • Russell 2000 1887.85

With one more day in the holiday shortened week, the only thing the market has to get through is the US employment report tomorrow. Last week the S&P and NASDAQ snapped a 7 week losing streak. The Dow snapped an 8 week losing streak.

Recent price action in the US stocks has seen stocks moving higher on weaker data. The theory is that if the economy slows, so will inflation. That will keep the Fed from going full steam ahead into the tightening cycle, including a 50 basis point hike in September. That is why after Fed’s Brainard was more hawkish today, the stocks still managed to reverse and move back higher.

How will the market react after the employment number. The ADP job estimate today came in weaker than expectations at 128K vs. 300K estimate. The factory orders for April was also weaker at 0.3% vs. 0.7% estimate.

The expectations for nonfarm payroll data is for:

  • nonfarm payroll +325K vs. 428K last month
  • unemployment rate 3.5% vs. 3.6% last month
  • average hourly earnings 0.4% vs. 0.3% last month
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