US Stock Market Overview – Stocks Rally Following Unexpected Jobs Gains

Gold & Silver

US stocks moved higher on Friday following a surprise increase in US jobs. Economists had expected a very large decline and the increase took most analysts off guard. All sectors in the S&P 500 index were higher, led up by energy following a 5% plus rally in crude oil. Crude oil prices are likely to continue to rally as workers get back on the road to commute to work.

Consumer staples which are a defensive sector were the worst performing in an up tape. The Dow Industrials was the best performing major average rising more than 3%. Small caps outperformed large-cap stocks with the Russel 2000  rising more than 4%. US yields moved higher with the 10-year rising 9-basis points and finishing the week up 25-basis points.

The dollar edged slightly higher, gold prices moved lower, weighing on metals and mining shares. With the Fed continuing to provide liquidity, and Congress likely to push forward another stimulus plan, stocks should continue to benefit from a move toward riskier assets.

US Jobs Numbers Surge

The Labor Department reported that US non-farm payrolls rose by 2.5 million in May and the jobless rate declined to 13.3. This compared to expectations that the unemployment rate to rise to 19.5% from April’s 14.7% and payrolls to drop by 8.33 million. The majority of the industry’s May gains were in foodservice, which suffered the worst of the nation’s layoffs in prior months. Employers added back some 1.37 million chefs, waiters, cashiers, and other restaurant staff in May. Construction added 464,000 positions while manufacturing added 225,000. Retail trade, netted 367,000 jobs as companies across the country hired back a fraction of the workers they laid off.

One figure that was not upbeat is that the black-unemployment rate rose slightly in May despite a decline of nearly two percentage points for white workers.  White unemployment fell to 12.4% from 14.2% in April, while black unemployment rose to 16.8% from 16.7%.

This article was originally posted on FX Empire

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