Remember how most people thought that the surprisingly weak jobs report for February was just a one-off and, therefore, not a sign that the sky was falling?
Well, they were right!
The Government Employment Situation report returned to its robust ways for March, as the economy added 196,000 jobs. That’s much better than expectations for somewhere around 170,000 to 180,000.
Most importantly, it gave the market a much-needed sigh of relief at a time when investors are chronically concerned about a slowing economy.
The major indices didn’t surge on the news as investors were pretty sure that last month’s reading was a fluke. But the report did keep stocks in the green on Friday and help the market to secure its second straight week of gains.
The S&P now has a seven-session winning streak after advancing 0.46% today to 2892.74. After all the waffling at the 2800 mark, the index is now less than 10 points from 2900. The next stop after that would be a new all-time high.
Meanwhile, the NASDAQ was actually the best performer on a percentage basis with a rise of 0.59% to 7938.69. The Dow increased 0.15% (or about 40 points) to 26,424.99.
For the week, the NASDAQ soared 2.7%, while the S&P was a little over 2% and the Dow was a little under 2%.
However, there were two issues that dominated this solid week. In addition to the jobs report, the market continued its constant vigil for a trade deal with China. China’s Vice Premier Liu He was in Washington this week for a new round of talks and he said that the two countries have reached a “new consensus” in their dealings.
In fact, we’ve heard a lot of happy talk from President Trump and other White House officials over the past several weeks, but the VP carried a similarly positive message from China President Xi Jinping boasting the progress that has been made and urging that the talks conclude as early as possible.
Trump says that we’ll know “over the next four weeks” whether there’s a deal or not. That seems like a long time considering the drumbeat toward a conclusion that we’ve been feeling. Maybe there will be a breakthrough sooner than that. Ultimately though, better late than never!
Today's Portfolio Highlights:
Stocks Under $10: Brian Bolan has talked about how volatile Lithium Americas (LAC) has been of late. Well, on Friday this miner was on the good side of volatility as it soared 12.4%. The performance easily made this stock the best performer of the day among all ZU names, and LAC is now up more than 17% since being added in early March. By the way, the runner up was also from this portfolio as Telenav (TNAV) advanced 5.7%.
Counterstrike: "Last night we saw a spike in futures after some comments out of China. President Xi called for an early conclusion of the China-US trade text and reiterated Trump’s view that substantial progress made in US trade talks. In addition, Vice Premier Liu added that new consensus was reached on text related to US/China economic and trade agreement and that they will to continue to work hard to conclude trade talks ASAP.
"So, the bullish theme continues as the market doesn’t seem to care that little details are known. But it does seem like we get a deal pretty soon, so bulls keep hanging around and buying every day on positive headlines.
"Markets keep grinding. Let’s see if we get some trade deal news over the weekend to finally turn the hope into reality. Earnings start at the end of next week, so it will be time to focus on actual earnings growth, rather than China. It will be an important earnings season for equities to prove themselves and continue the bullish momentum." -- Jeremy Mullin
Options Trader: "The markets took a victory lap after Friday’s Employment Situation Report came in better than expected with 196,000 new jobs (182,000 in the private sector and 14,000 in the public) vs. expectations for 170,000. This proved that February’s weaker than expected report was indeed an anomaly due to the partial government shutdown the month before.
"The jobs market continues to underscore what a strong economy we have. It truly looks like 2019 is going to be a banner year. And I would not be surprised to see the S&P up by more than 30% by year’s end. The last time we cracked the 30% mark was in 2013 with 32.39%. Before that you have to go back to 1997 for 33.25%; 1995 for 36.31%; 1991 for 30.40%; and 1989 for 31.70%.
"The S&P is already up 15.39% YTD. So I’m essentially expecting another 15% between now and December. And I think we’ll get it." -- Kevin Matras
Have a Great Weekend!
Jim Giaquinto
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