The S&P 500 index rose 2% in the first week of November, setting new highs for the seventh session in a row as Q3 earnings continued coming in above analysts’ estimates while October jobs data also topped expectations.
The winning streak has come on better-than-expected Q3 results. While supply-chain challenges, the continuation of the COVID-19 pandemic and inflation concerns have persisted, in many cases these issues haven’t dented profits by as much as analysts and investors had feared.
Investors also received encouraging data on October employment last week. Wednesday, ADP data on the private sector showed a larger-than-expected increase in jobs last month. Thursday, the Labor Department reported a lower-than-expected number of jobless claims for last week that also reflected a fifth-consecutive decline in weekly jobless claims.
Friday, the Labor Department’s monthly report for October showed nonfarm payrolls rose by 531,000, which was more than the 450,000 jobs increase expected in a survey compiled by Bloomberg, while September payrolls saw a large upward revision to a 312,000 increase. The unemployment rate fell to 4.6% in October from 4.8% in September, compared with the 4.7% rate expected.
Also in focus last week, the Federal Reserve’s Federal Open Markets Committee announced that it would start tapering its bond-buying support program. The move had been widely anticipated, while the FOMC kept its benchmark lending rate near zero.
By sector, the consumer discretionary sector had the largest percentage increase of the week, up 5%, followed by a 3.3% rise in technology and a 3.2% boost in materials. There were just two sectors in the red for the week: Health care slipped 0.7% while financials edged down 0.6%.
Next week, the earnings calendar features Zynga (ZNGA), PayPal Holdings (PYPL), D.R. Horton (DHI), Wendy’s (WEN) and Walt Disney (DIS), among other companies reporting quarterly results.
Economic data next week are expected to include the October consumer price index and producer price index as well as a preliminary reading on consumer sentiment for November.
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October 2021 Jobs Report Reveals Hiring Surge – Daily Flash Briefing