August 2 - 6, 2021 Recap
Jobs Data Soothes Delta Fears
U.S. stocks posted moderate gains last week following a stronger-than-expected July jobs report that eased concerns about the detrimental impact the Delta viral variant is having on the economy. Bullish sentiment was capped however as the solid pickup in hiring stirred fears that the Fed may speed up its timetable on announcing tapering of monthly bond purchases. The S&P 500 finished Friday at its 44th all-time-high this year. Investors are now awaiting key inflation data on consumer and wholesale prices due out for release this week.
For the Week…
All three major U.S. equity averages erased prior week losses. The S&P 500 rebounded 0.96%, more than erasing the prior week’s 0.35% decline. The Dow gained 0.78% after falling 0.36%, and the tech-heavy Nasdaq Composite gained 1.14% after falling 1.10% the week prior.
Payrolls Rise Most in a Year
The U.S. economy added 943,000 new jobs in July and the prior two months were revised higher by 119,000. 75% of the 22.4 million jobs lost in last year’s recession have now been recovered. Also positive, the headline unemployment rate fell to 5.4% from 5.9% while the underemployment rate declined to 9.2% from 9.8%. Wages grew 0.4% M/M and are now up 4.0% from a year ago.
Top Weekly Gainer: Financials
All but one of the 11 major sector groups advanced last week, led by Financials (+3.60%), Utilities (+2.31%) and Technology (+0.98%). Industrials (+0.18%) and Materials (+0.16%) gained the least while Consumer Staples (-0.54%) declined.
Roller Coaster Treasury Yields
Treasury yields rose last week as Friday’s nonfarm payrolls report reversed a downward trend in rates. Benchmark 10-year Treasury prices had rallied early in the week amid concerns over slowing economic growth, sending its yield spiraling to a deep intra-day Thursday low at 1.13%. Yet benchmark rates jumped Friday to end the week at 1.29%. For the week, the U.S. Dollar Index strengthened by 0.68%, while U.S. WTI crude oil futures skidded 7.7% to end at $68.28/barrel.