Shares hit new highs despite tough jobs report

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Why? The weak numbers underscore Washington’s need for more stimulus.

The Dow, S&P 500 and Nasdaq were all higher at the start of trading – although the Dow abandoned its gains later – as investors appear to be betting more help will be available soon. Joe Biden will be inaugurated in less than two weeks and Democrats now control the Senate as well as the House following this week’s election in Georgia.

“The ongoing battle against the pandemic is once again putting pressure on the real economy,” Charlie Ripley, senior investment strategist for Allianz Investment Management, said in an email to CNN Business, “and despite what the financial markets are signaling, the labor market is indicating that there is still some way to go on the economic road to recovery. ”

“The ability of Congress to provide additional tax support has increased and today’s jobs report is simply urging them to do so,” Ripley added.

Hopes are also growing for an economic recovery as well as corporate profits later this year as more people are likely to receive one of the Covid-19 vaccines Pfizer (PFE) and BioNTech (BNTX) or Modern (RNAm).

“Investors are already looking at this temporary period of economic weakness and instead focusing on the brighter outlook where fiscal spending, monetary stimulus measures, and the massive distribution of COVID-19 vaccines together ensure the U.S. economy’s rapid comeback. its pre-pandemic trajectory, ”said Seema Shah, chief strategist at Principal Global Investors, in a report Friday.

Hopes of an economic recovery are probably one reason bond yields are also rebounding. The 10-year US Treasury yield recently exceeded 1% for the first time since March and edged up after the jobs report.

“This low number of jobs today may be transient,” said Jim Caron, portfolio manager of global fixed income at Morgan Stanley Investment Management, in an interview with CNN Business.

“This data was not good, but investors are looking beyond recent volatility for clearer days to come,” Caron added. He also noted that investors realize the Federal Reserve is likely to keep interest rates close to zero for several years, possibly until 2024.

There are other signs of economic improvement in recent times, despite weak employment.

The most recent ISM manufacturing report showed a continued rebound for many U.S. industrial sectors, said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Company.

Can something stop Tesla and Elon Musk?

In other market news, You’re here (TSLA) Stocks continued their electrifying run, rising another 4% on Friday. Elon Musk’s automaker has climbed more than 20% already in 2021. The company is worth more than $ 800 billion, exceeding the market value of Facebook (FB).
Tesla is now the fifth most valuable company in the S&P 500, behind only Apple (AAPL), Microsoft (MSFT), Amazon (AMZN) and owner of Google Alphabet (GOOGL).
Elon Musk overtakes Jeff Bezos to become the richest person in the world
Shares of Social Capital Hedosophia Holdings Corp. V, a special-purpose blank check acquisition company, rose about 10% on Friday after climbing nearly 60% on Thursday on news the loan company in SoFi line plans to merge with it in order to go public.

The deal values ​​SoFi at nearly $ 8.7 billion.

And Bitcoin (XBT) continued to climb as well. The cryptocurrency, which first crossed $ 40,000 on Thursday, is now worth almost $ 42,000.

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