The Bears Get Smashed as the S&P Soars Past 1600
Today's financial recap and tomorrow's financial outlook.
Following a recent spate of economic data implying a US slowdown, not to mention an earnings season that can be described as so-so at best, it appears that expectations were fairly low heading into this morning's jobs report.
Thus, the bears were caught off guard when the big headline number -- the change in nonfarm payrolls -- came in at 165K, beating the 138K consensus. Additionally, both the February and March numbers were revised up significantly.
On the negative side, average weekly work hours and aggregate earnings declined while the underemployment rate rose, but again, expectations were fairly low and traders were content to cue off the positive headline numbers.
That 165K print drove a day that can very much be described as risk-on. The small-cap Russell 2000 (INDEXRUSSELL:RUT) was up significantly, as were economically-sensitive sectors like Industrials and Materials.
Somewhat unusually, high-yield bonds were flat-to-up on a price basis today. This took some traders by surprise; when considering the sharp increase in yields, the conventional wisdom would imply at least a modest decline in the high-yield market. This particular sector has been on a tear as of late, and today's move, while not impressive on a nominal basis, represents an extension in momentum for a seemingly overheated sector.
Tomorrow's Financial Outlook
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