ASX set to jump higher as Wall Street bounces on surprising jobs data


The indexes are all on track for solid weekly percentage gains.

The US economy added 4.8 million jobs in June according to the Labor Department, 1.8 million more than analysts expected, setting a second consecutive record.

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Massive rehiring sent the unemployment rate down to 11.1 per cent.

“A lot of these numbers when you dig into the report – average weekly hours people are working, average hourly earnings … those things are just showing that we are getting back to work,” said Justin Hoogendoorn, head of Fixed Income Strategic Analytics at Piper Sandler in Chicago. “And that’s what’s going to allow the stock market to continue to perform well.”

Even with May and June’s consecutive record payroll gains, the labor market has still recovered only a fraction of the 22 million jobs lost in the March-April plunge.

The recovery of the US economy, now in its sixth month of recession, could stall as new cases of COVID-19 hit record levels and several states hit hardest by the resurgence halted or reversed plans to reopen their economies.

On Thursday, Florida reported a record-shattering 10,000 new cases of the disease, worse than any European country reported at the peak of their outbreaks.

In the coming weeks, market participants will train their focus on second-quarter reporting season. In aggregate, analysts now expect S&P earnings to have dropped by 43.1 per cent as companies grappled with plunging demand and disrupted supply chains.

All 11 major sectors in the S&P 500 were trading in the black, with energy shares enjoying the largest percentage gain.

In late trade, the Dow Jones Industrial Average has risen 1.2 per cent, the S&P 500 is up 1.2 per cent, and the Nasdaq Composite has added 1.2 per cent.

Microsoft provided the biggest boost to the S&P 500 and the Nasdaq, and in June retained its top spot as the most globally invested stock, according to data from trading platform eToro.

Airlines, battered by pandemic-related travel restrictions, gained altitude. The S&P 1500 Airlines index was up 1.2 per cent.

Tesla jumped 7.8 per cent after the electric car maker’s second-quarter vehicle deliveries beat Wall Street estimates.

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Advancing issues outnumbered declining ones on the NYSE by a 2.98-to-1 ratio; on Nasdaq, a 1.68-to-1 ratio favoured advancers.

The S&P 500 posted 35 new 52-week highs and no new lows; the Nasdaq Composite recorded 115 new highs and 10 new lows.

Reuters

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