| Friday's Headlines 1. US markets soar on better-than-expected jobs report 2. US employers add 2.5 million to payrolls as unemployment falls to 13.1% 3. Job gains uneven across sectors and race 4. Stocks hitting all-time highs 5. What to expect next week Markets Closed
Year-to-Date
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Markets Today U.S. markets staged a massive rally on the heels of a better-than-expected May jobs report, which showed an unexpected drop in the unemployment rate and a surprise addition of 2.5 million jobs. Economists and investors were expecting much worse, and the monthly job adds were the most in the history of the U.S. labor force.
Stocks surged across all sectors, with the Nasdaq hitting a record high for the first time since February. Financial stocks soared as positive signs in the economy are good for the banking business. Airlines continued their ascent as demand shows signs of returning, and industrial stocks continued to climb as economies continue to open.
The job gains were uneven, to be sure, but stock investors just want to know that the worst may be behind us in terms of unemployment, manufacturing, and consumer spending.
The data we've seen this week suggests that may be true, for now.  chart courtesy YCharts
Headlines:
 May's Shocking Jobs Report In a historic and surprising surge in hiring, U.S. employers added 2.5 million jobs in May, shocking economists and investors who were expecting millions of additional job losses amid the economic recession brought on by the pandemic. The unemployment rate, at 13.3%, fell from 14.1% in May, and was sharply lower than forecasts of up to 20%.
The reversal comes in the face of mounting weekly jobless claims over the past ten weeks that total more than 40 million American workers. The May unemployment report showed that workers who were temporarily laid off at the start of the crisis were rehired, as that number decreased by 2.7 million. It was 15.3 million in April, and 16.2 million in March, according to the Labor Dept.
Among the major worker groups, the unemployment rate declined for adult men and women, overall, and for white and Latino workers. The rate barely budged for black and Asian American workers, in addition to workers under 20 years old, according to the Bureau of Labor Statistics.
Here's where the hiring was concentrated:  What the Jobs Headlines Miss While the surge in hiring and the fall in the unemployment rate are great news by any measure, the depth of the damage from the economic shutdown has been severe. Twenty-one million Americans remain out of work; 10.6 million are working part-time, but they wish to be full-time; and another 4.4 million are entirely out of the workforce, but they want back in.
Also, the Labor Dept.'s survey captures data from employers and state unemployment offices by the 12th of every month. That leaves two-thirds of the month of May basically unaccounted for. Weekly jobless claims have been declining, but they still topped 1.8 million last week.
If continuing claims for unemployment insurance decrease again in next week's report, we'll know if this trend is really headed in the right direction.  Stocks Hitting All-Time Highs Nearly 100 U.S. listed stocks hit their all-time highs today, but just to give you a sense of the sentiment and the mix of those companies, here are some of the highlights:
What to Expect Next Week Here's a look at asset classes returns year-to-date:  Economic Events This Week
Sunday, June 7:
Monday, June 8:
Tuesday, June 9:
Wednesday, June 10:
Thursday, June 11:
Friday, June 12:
Trade Balances
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(chart courtesy YCHARTS)  Shares of oil companies, such as Occidental Petroleum (35.5%), Apache (over 24%), and Marathon Oil (over 17%), are up following a report that OPEC and its partners will extend the oil production cut through July. Cruise line stocks, including Royal Caribbean (over 22%), Carnival (nearly 17%), and Norwegian (nearly 17%), rose today as investor outlook on the travel industry continues to improve.  Shares of Quest Diagnostics are down by 2% after the company reported a material decline in its testing volumes as a result of the ongoing pandemic. Newmont's stock price fell 2% amid the price of gold falling to a two-month low. Word of the Day The U-6 Unemployment RateThe U-6 rate is the unemployment rate that includes discouraged workers who have quit looking for a job and part-time workers who are seeking full-time employment. The U-6 rate is considered by many economists to be the most revealing measure of a country's unemployment situation since it covers the percentage of the labor force that is unemployed, underemployed, and discouraged.  Today in History June 5, 1883: John Maynard Keynes, who ended up doing more than any other individual to undo the legacy of Adam Smith, is born in Cambridge, England. Between World War I and World War II, Keynes devised the theories that lead to massive government intervention in economies around the world. His criticisms of free markets, however, did not deter him from making a small fortune on the stock market.
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Friday, June 5, 2020
Record Highs
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