Before The Bell
The stock market, which waxed and waned yesterday, appears likely to open this morning's session to the upside on continuing optimism about coming vaccines to treat the coronavirus, and despite the issuance, just moments ago, of a disappointing report on U.S. job creation in November.
Specifically, the nation added 245,000 positions last month. That was less than either the month before, when job increases totaled 610,000 or expectations for November of 450,000. Also, the critical labor force participation rate eased to 61.5%. All told, job losses since the February peak, remain at 9.8 million. One good piece of news is that the unemployment rate dipped to 6.7% from 6.9% in October. That was in line with expectations.
Meantime, the stock market also had opened on an up note yesterday, as the uneven first days of December moved along. This choppy performance followed a stellar November, as optimism on a trio of vaccines to prevent the deadly coronavirus fueled hopes that by the spring, the pandemic would be on the decline. Since the stock market often looks ahead by a number of months, such positive leanings are understandable and are helping to embolden the bulls. Currently, though, the disease is setting unfortunate records and beginning to negatively impact the economy again.
As for the stock market, it began the day with the Dow Jones Industrial Average rising by some 200 points. The blue chips then would falter a little into the mid-afternoon part of the trading day before rallying strongly as we entered the home stretch, with the Dow climbing back above 30,000, to just under a record before easing back near the close to end matters ahead by 85 points. The broader-based S&P 500 Index would chart a similar pattern but dip into the red at the close, while the NASDAQ would gain grudgingly.
In economic news on this last trading day of the week, the Institute for Supply Management noted that its non-manufacturing survey showed that growth in the U.S. services sector, including health care and retail, was stronger in November than had been expected. Also, the latest week saw that fewer Americans had filed for unemployment benefits than forecast. Economists cautioned, though, that the Thanksgiving break may have influenced this improvement.
In other positive developments, there were signs Democrats and Republicans may get past their very bitter partisanship to finally fashion a modest bipartisan relief bill now and secure a more aggressive pact in 2021. The need for such assistance is obvious given the heavy toll exacted by COVID-19 on the nation's economy and the likely additional fallout expected in early 2021 as the pandemic's cost rises. In all, the picture is mixed as we look ahead to the end of the year and peer out to an uncertain early months of 2021.
– Harvey S. Katz, CFA
At the time of this article's writing, the author did not have positions in any of the companies mentioned.
