Dismal Labor Report Unable to Shake Bulls…..

U.S. equities finished solidly in the green, with the markets posting weekly gains across the board, as investors appeared to shrug off an expectedly dismal April labor report that showed a plunge in April employment and an historic spike in the unemployment rate, opting to focus on the optimism of progress in economic reopenings in some U.S. states and key regions in Europe, along with recent signs of recovery in China. On the earnings front, Uber Technologies continued a recent theme of potential April stabilization from the severe impact of the COVID-19 pandemic, though Bookings Holdings showed the virus’ impact on the travel industry that is likely to remain for some time. Treasury yields finished higher, as bond prices declined, and the U.S. dollar was lower, while crude oil prices were higher and gold lost modest ground in choppy trading. Markets in Europe and Asia also finished with widespread gains amid the optimism.

The Dow Jones Industrial Average jumped 455 points (1.9%) to 24,331, the S&P 500 Index increased 49 points (1.7%) to 2,930, and the Nasdaq Composite moved 142 points (1.6%) higher to 9,121. In moderately heavy volume, 909 million shares were traded on the NYSE and 3.8 billion shares changed hands on the NASDAQ. WTI crude oil gained $1.19 to $24.74 per barrel and wholesale gasoline added $0.02 to $0.95 per gallon. Elsewhere, the Bloomberg gold spot price was $10.57 lower at $1,705.49 per ounce, while the Dollar Index—a comparison of the U.S. dollar to six major world currencies—ticked 0.1% lower to 99.77. Markets were higher for the week, as the DJIA gained 2.6%, the S&P 500 advanced 3.5%, and the Nasdaq Composite rallied 6.0%.

The majority of earnings season is in the books, and while showing the severe impact of COVID-19 and fostering heightened uncertainty moving forward, the stock markets continue to move further north of the March 23rd lows. Of the 433 S&P 500 companies that have reported Q1 results thus far, nearly 60% have topped revenue estimates and roughly 68% have exceeded profit projections, per data compiled by Bloomberg. Additionally, Bloomberg is projecting that revenue growth is at 0.9% y/y and earnings growth is tracking to be down 7.2%.

Treasuries finished lower, as the yield on the 2-year note rose 2 basis points (bps) to 0.15%, the yield on the 10-year note was up 5 bps at 0.68% and the 30-year bond rate gained 7 bps to 1.39%.

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