Friday, March 5, 2021
Jobs Growth Ticks Higher
The US economy gained 379,000 jobs in February according to the US Bureau of Labor Statistics, exceeding Bloomberg survey estimates of a 200,000 gain, aided by seasonal adjustments and paired with strong revisions to January numbers. The unemployment rate fell 0.1% to 6.2% and was paired with an unchanged labor force participation rate. We take a closer look at the state of the US labor market in today’s LPL Research blog, available at 12pm ET.
Stocks surge after jobs release shows improvement in the labor market is better than expected
- US stocks opened little changed after the Nasdaq 100 continued to lead markets lower on Thursday.
- West Texas Intermediate (WTI) crude oil prices surpass $65/barrel after OPEC+ declined to adjust production output.
- European markets little changed, with the United Kingdom outperforming.
- Asian stocks dipped overnight but finished well off the lows.
Federal Reserve (Fed) reiterates dovish stance amid advance in Treasury yields
- Taking notice of the rise in yields, Federal Reserve Chair Jerome Powell added he would be concerned with disorderly markets or a tightening of financial conditions that would threaten the path of the recovery.
- Despite comments indicating the Fed is a long way from pulling support from the economy, markets seemed disappointed by the lack of details of how the Fed might manage the rise in long-term rates.
- Chairman Powell also failed to comment on the possible resurrection of “operation twist”—where the Fed would lighten its holdings of short-term bonds to purchase longer-dated securities.
- A second straight day of the 10-year Treasury yield rising 8 basis points finally pushed the S&P 500 Index below its closely watched 50-day moving average. However, more than half the stocks in the S&P 500 remain above their 50-day moving average, a sign that markets are not yet oversold.
- The Nasdaq 100 is now 9.7% off its closing highs and firmly in correction territory using intraday levels.
The United States reported 65,000 new COVID-19 cases on Thursday, down 16% week over week, though the overall trend decline has slowed since early February (source: Johns Hopkins).
- Primary concern continues to be the impact of B117 COVID variant, which is estimated to account for about 20% of new US cases
- Daily administered vaccine doses in the US have now surpassed 2 million
- Cases in Western Europe have continued to eek higher, although Spain remains the outlier that sees cases declining
LPL Research in the Media
Yield spike spooks stock investors
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
All index and market data are from FactSet and MarketWatch.
This Research material was prepared by LPL Financial, LLC.
Insurance products are offered through LPL or its licensed affiliates. To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL affiliate, please note LPL makes no representation with respect to such entity.
- Not Insured by FDIC/NCUA or Any Other Government Agency
- Not Bank/Credit Union Guaranteed
- Not Bank/Credit Union Deposits or Obligations
- May Lose Value
For Public Use – Tracking # 1-05118800