The market moved higher, even after 20 million job losses in April.
The stock market finished nearly 2% higher on Friday, despite one of the worst monthly jobs reports in history, as investors continued to look toward a reopening of the economy and bet that the worst of the economic impact from coronavirus has passed.Johannes Eisele/AFP via Getty ImagesThe Dow Jones Industrial Average rose 1.9%, 450 points, on Friday, while the S&P 500 was up 1.7% and the Nasdaq 1.6%.
Those gains came even amid a historically bad jobs report from the Labor Department, the worst since the 1929 Great Depression. Some 20.5 million jobs have been eliminated in April—that’s nearly every job created over the past decade, gone in a single month. But neither figures were as bad as expected on Wall Street, however: Economists polled by Dow Jones expected 21.5 million jobs lost and an unemployment rate of 16%.
“Today’s report tells us the labor market isn’t as dire as the headlines suggest, which is why equity prices and bond yields are getting a lift,” says Charlie Ripley, senior investment strategist for Allianz Investment Management.Just two months ago, the unemployment rate was sitting at a 50-year low of 3.5%, after the United States had been adding jobs every month for nearly a decade.
“Perhaps the ‘best’ news in the report was that of the 23 million workers who were unemployed in April, about 18 million thought that this was short-term ,” says Nationwide Chief Economist David Berson.Stocks have rallied aggressively off their March lows as Wall Street becomes increasingly optimistic about a reopening of the economy. Despite dismal economic data and first quarter corporate earnings reports, stocks have looked beyond the near-term turmoil caused by coronavirus.
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