Disappointing Job Results
January jobs report reflects a recovering, yet sluggish economy
The US Labor Department released the January jobs report, showing the US economy adding 49,000 jobs in the month of January and the unemployment rate falling to 6.3%, the first decrease in two months. This fell short of the 50,000 projected jobs gain, but it is a better than expected performance for the economy against the 6.7% unemployment rate projection. While this is positive news following the job losses incurred in December, Independent Advisor Alliance’s chief investment officer, Chris Zaccarelli has called these numbers “particularly underwhelming”. This jobs report only shows the public how fragile the US economy is at this moment and continued stimulus and cautious reopening of the private sector is still necessary. In spite of all this, investors are shrugging off the weak job results as they look forward to the likeliness of another stimulus relief bill.
Stock Market Hits Record Highs
Amid new potential stimulus, S&P 500 and Nasdaq indexes hit record highs
On Friday, the S&P 500 and Nasdaq indexes closed at record highs as the potential for another stimulus relief bill looms ahead. Friday morning, the US Senate approved a resolution allowing for the passage of a $1.9 trillion relief bill without any Republican support. This comes as news of another additional round of stimulus checks such as $1,400 per adult would be included in the new stimulus bill. It was an overall good day on Wall Street as oil and gold rose and the unemployment rate fell to 6.3%. Today’s gains gave the Dow Jones its best 5-day stretch since November, as the index ended the week up nearly 4%. Investors are feeling more confident about entering the stock market, following modest wage gains over the last month and the Federal Reserve holding rates steady at near zero levels. Corporate earnings have also boosted the market and investor sentiment as companies such as Apple and Microsoft have posted “stunning” results, with Apple earning over $100 billion of revenue over the 4th quarter for the first time. This has been an overall great week for the market and economists now may have to rethink their future economic projections.
COVID-19
Johnson & Johnson, AstraZeneca, & Covid-19
As we start the second month of 2021, Covid-19 still remains the number one issue. In spite of rising cases, progress is being made across the country as pharmaceutical companies Johnson & Johnson and AstraZeneca are moving ahead with their respective vaccines. Johnson & Johnson has officially requested the FDA to grant them emergency authorizations to approve, manufacture and distribute this vaccine, while studies on AstraZeneca show that its vaccine is able to protect against the new, more contagious variant of the virus found in the United Kingdom, also known as variant B.1.1.7. In addition, back home in the United States, the federal government is seeking to ramp up its vaccination efforts as the Pentagon will be deploying over a thousand active duty members to assist vaccination sites. Lastly, there is the increasing likeliness of a massive $1.9 trillion Covid-19 stimulus bill passing. News of these events have been largely influencing the markets these past few weeks, driving the major indexes up and this week and providing the Dow Jones with its best 5-day stretch since last November.
Works Cited
“CL.1: Crude Oil WTI (NYM $/Bbl) Front Month Overview.” MarketWatch, www.marketwatch.com/investing/future/crude%20oil%20-%20electronic.
“Market Summary – US Stock Market Overview.” MarketWatch, www.marketwatch.com/tools/marketsummary.
Monica, Paul R. La. “Stocks Rise Again Even as Jobs Report Shows Slow Recovery.” CNN, Cable News Network, 5 Feb. 2021, www.cnn.com/2021/02/05/investing/dow-stock-market-today-jobs-report/index.html.
Robbins, Benjamin Mueller and Rebecca. “Covid-19 Live Updates: AstraZeneca Shot Found to Be Protective Against Variant First Seen in U.K.” The New York Times, The New York Times, 5 Feb. 2021, www.nytimes.com/live/2021/02/05/world/covid-19-coronavirus.
“S&P 500, Nasdaq Close at Record Highs as $1.9 Trillion Stimulus Package Works Its Way through Congress.” Business Insider, Business Insider, markets.businessinsider.com/news/stocks/stock-market-news-today-record-highs-trillion-stimulus-moves-ahead-2021-2-1030049746.