Stocks Rise, Nearing Record Highs
Equities Rebound Second Week
The S&P 500 rose to within a whisper of its May 7 all-time high as Friday’s jobs data boosted recovery confidence while a pickup in wages (+0.5% M/M, +2% Y/Y) added to inflation concerns. Stocks began the holiday-shortened week fluctuating between small gains and losses amid worries over rising prices before bullish momentum returned to close out the week. The U.S. added slightly fewer jobs than economists projected while the unemployment rate fell more than expected. Altogether, the mixed data presented Wall Street with a Goldilocks view that Americans are returning to work but not at a pace that would prompt the Federal Reserve to pare back additional economic support.
For the Week…
The S&P 500 gained 0.64% last week, the Dow Industrials rose 0.66% and the tech-heavy Nasdaq Composite gained for a third straight week, rising 0.49%. In style performance, Small cap Value continues to outperform most, rising 1.8% last week versus its Growth (-0.38%) counterpart.
Jobless Claims at Lowest Since Mid-March 2020
Weekly state jobless claims fell below the 400,000 mark for the first time during the pandemic, declining by 20,000 to 385,000. Economists projected 387,000. Claims fell the most in Texas, Florida and Oregon. Continuing claims in all programs declined by 366,178 to 15,435,982, which is down from 30,770,615 in the same week a year ago.
Energy Leads Again
Nine of the 11 major sectors posted gains last week, with Energy (+6.70%), Real Estate (+3.05%) and Financials (+1.27%) rising the most. Industrials (+0.23%) gained the least, while Healthcare (-1.15%) and Consumer Discretionary (-0.95%) declined. Energy (+48.6%) and Financials (+31.2%) are up the most this year, followed by Real Estate (+23.1%).
Treasury Yields Slip
Treasury yields back-peddled again last week, with the 10-year Treasury yield falling around three basis points to end Friday at 1.55%. The U.S. Dollar Index strengthened a second week, rising 0.12%. U.S. WTI Crude oil futures rose nearly 5% last week, helping push the Bloomberg Commodities Index to end the week at a six-year high.