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Weekly Economic Update: Mixed Market Results

Presented by Nicholas Wealth Management

May 10th , 2021


Weekly Market Update

In this week’s recap: Mixed market results as labor numbers cope with uncertainty.


The Week on Wall Street

Stocks closed mixed last week as signs of continued economic recovery and upbeat earnings helped some sectors while the struggles persisted for high-growth companies.

The Dow Jones Industrial Average gained 2.67%, while the Standard & Poor’s 500 rose 1.23%. But the Nasdaq Composite index, home for many high-growth companies, lost 1.51%. The MSCI EAFE index, which tracks developed overseas stock markets, advanced 1.20%.1,2,3


Mixed Market

Energy, financials, materials, and industrials led the market higher on more upbeat news regarding the economic recovery.

But technology and other high-valuation companies didn’t participate in the rally, weighed down by Treasury Secretary Janet Yellen’s comments that interest rates may need to rise. Despite a decline in long bond yields, high growth stocks were under selling pressure for most of the week.4

On Friday, a miss on April employment numbers seemed to dial back fears that the Fed might have to adjust interest rates. Stocks rallied on the news, especially some of the hard hit high-valuation companies.5


Labor Market Puzzle

The labor market appears to be gaining momentum ahead of a fuller summer reopening. The Automated Data Processing National Employment Report showed that private payrolls rose by 742,000 jobs (the largest gain since September 2020), while new jobless claims fell to under 500,000, sending its four-week average to the lowest point since the pandemic began.6,7

With expectations set very high, the April employment report (266,000 new jobs) came in well short of the consensus estimate of one million new jobs. Businesses have complained about difficulties in hiring workers, with individuals delaying their return to the workforce due to health concerns and ongoing school closings.5


Tip of the Week

When you get a minute, make a photocopy of all the material in your wallet. If you lose it, you'll have a photocopy of the contents rather than relying on your memory..


Media

https://url.us.m.mimecastprotect.com/s/YGoECqxnMYCLD20frrBUy_?domain=youtube.com
Inflation is causing a tug and pull between the Dow and the Nasdaq. Stocks in the $DJIA are benefiting from inflation, while tech stocks in the $NDX are being hurt by inflation. David Nicholas joined Ashley Webster on Fox Business on Tuesday (5/11) to discuss why the market can't handle the truth about inflation and more!

Be sure to subscribe to our YouTube page for all of David’s media commentaries CLICK HERE!



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CITATIONS:

1. The Wall Street Journal, May 7, 2021

2. The Wall Street Journal, May 7, 2021

3. The Wall Street Journal, May 7, 2021

4. FoxBusiness.com, May 4, 2021

5. CNBC, May 7, 2021

6. Reuters, May 5, 2021

7. The Wall Street Journal, May 6, 2021