Shares rose Friday even after the ugliest monthly job report, as investors wagered the worst of the coronavirus and its impact on the economy is past.
The Dow Jones Industrial Average trades 329 points more, or 1.4%. The S&P 500 gained 1.1% while the Nasdaq Composite gained 0.7%.
The Ministry of Labor said a record 20.5 million jobs were lost last month, adding that the unemployment rate fell from 4.4% to 14.7%. Soaring job losses and soaring unemployment rates are post-World War II records. Certainly, no impression was as bad as we feared. Economists polled by Dow Jones had forecast a loss of 21.5 million jobs and an unemployment rate of 16%.
“You have investors who seem to be able to look through the tsunami of negative economic data and profits and the potential for a gradual reopening of the economy,” said Art Hogan, chief market strategist at National Securities .
Stocks have rallied sharply from their March lows, with investors betting that the economy may reopen and that many tech companies would see solid earnings even if they closed. The S&P 500 has rebounded by more than 30% from its weak virus and is only 15% from a record. The Nasdaq Composite is at more than 35% of its lows and is now up 0.1% for 2020. Gains from Facebook, Amazon Alphabet and Apple helped bring the index back into positive territory for 2020. At one point, the Nasdaq has declined by more than 25% year to date.
Most of these technological actions were once again higher during the pre-market exchanges on Friday.
“It’s really amazing given that we’re still working from home,” said JJ Kinahan, chief market strategist at TD Ameritrade, about the average recovery of losses in 2020. “Our reality is that we’re working from home and part of the economic demand seems to be less, but these actions continue to fight. ”
Kinahan also noted that the market price continues to rapidly reopen the US economy after the coronavirus forced economic activity to a near halt. “There is this feeling of” OK, we’re going to go back to work and things will get better. “But how quickly will they improve and will it be sustainable?”
It is useful that oil has rebounded from its lows. Crude oil rose more than 20% this week.
Sentiment on Wall Street was also helped after Secretary of the Treasury Steven Mnuchin and US Trade Representative Robert Lighthizer on Thursday spoke to Chinese Vice Premier Liu He about the Live One Trade Agreement signed in January. In a statement, they said the two sides “agreed that despite the current global health emergency, the two countries fully expect to meet their obligations under the agreement in a timely manner.”
The call and the ensuing statement came amid growing tensions between the two countries, as US officials criticized China’s initial management of the coronavirus epidemic.
But Michael Shaoul, president and chief executive officer of Marketfield Asset Management, said recent market movements – which have been tame compared to others seen this year – suggest “understandable fatigue with the constant flow of conflicting information about the progression of the virus and the potential for happier and more drastic results in the coming months. ”
“It also suggests that the relief that the worst medical scenarios are likely to occur is replaced by an understanding of the magnitude of the task of reopening and rebuilding economies in the months to come, leaving the SPX unable to progress and challenge key resistance at 3000, “he said in a note.
The shares that would benefit from the reopening of the economy rose again on Friday morning. As of Friday, airlines, Disney, MGM Resorts and Hilton Worldwide were all higher in pre-market trade.