Stock futures opened higher Sunday evening, pointing toward advances to kick off the week.
An unexpectedly strong May jobs report fueled a stock rally that briefly sent the Nasdaq Composite above its February 19 record high during Friday’s session. The surge added to a weeks-long melt-up in equities, as investors eyed signs that early moves to reopen businesses were bringing back some workers and driving advances in economic activity.
“Nonfarm payrolls unexpectedly rebounded by 2.5mn [million] in May, and the details of the report are consistent with a large and genuine rebound in labor market activity,” Goldman Sachs economists led by Jan Hatzius said in a note. “The unemployment rate declined from 14.7% in April to 13.3% in May, much lower than expected, though the BLS suggested that 16.4% of the workforce remains unemployed after adjusting for a misclassification of workers employed but not at work (down from 19.5% in April).”
“Encouragingly on that front, three quarters of coronacrisis job losers reported being on temporary layoff in May—a positive sign for the strength of the coming labor market recovery,” the economists added. “We expect the unemployment rate to fall further in June.”
Still, at least some economists noted that the unexpectedly strong rebound in the labor market evidenced in the jobs report could discourage lawmakers from injecting further economic stimulus. Others also noted that the distribution of hundreds of billions of dollars via Congress’s Paycheck Protection Program in May could have led to an overstatement of the number of workers brought back on payrolls permanently, with another wave of layoffs a lingering risk once funds from the program run out.
While market participants await further data to affirm the pace of the recovery, more cities and states reopening their economies have so far provided ample fuel for risk assets. New York City will kick off its first phase of reopening on Monday, joining the rest of the state and many other metropolitan areas across the country in bringing businesses back online after pausing in mid-March. The state overall reported a 0.2% one-day increase in new cases on Sunday, or the lowest pace in more than two months.
New York City also on Sunday lifted its curfew related to protests and unrests spurred by the killing of George Floyd, joining Chicago and Philadelphia in easing city-wide measures to limit violence and property destruction as the mass gatherings settled. Protests neared the two-week mark in many major cities nationwide, with the vast majority of these taking place peacefully.
Later this week, market participants will receive inflationary economic data in the monthly consumer price index and producer price index, as well as the Federal Open Market Committee’s latest monetary policy decision. The Federal Reserve will likely keep its target range for the federal funds rate between 0% to 0.25% and signal policymakers’ expectations to keep interest rates near zero for the next two years, based on consensus expectations.
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6:02 p.m. ET Sunday: Stock futures rise, adding to last week’s gains
Here were the main moves at the start of the overnight session for U.S. equity futures, as of 6:02 p.m. ET:
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S&P 500 futures (ES=F): 3,197.75, up 11 points, or 0.35%
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Dow futures (YM=F): 26,165.00, up 93 points, or 0.34%
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Nasdaq futures (NQ=F): 9,834.00, up 25.5 points, or 0.26%
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June 08, 2020 at 05:15AM
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Stock market news live updates: Stock futures open higher, extending rally - Yahoo Finance
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