By Mark DeCambre
Michael Hewson, chief market analyst at CMC Markets, said that jobs picture was befuddling compared with other healthy economic readings but does reinforce views that the recovery from the viral outbreak will be an uneven one.
“As Fed chair Jay Powell indicated only recently, one decent set of jobs numbers does not a recovery make, and today’s surprise miss is a timely reminder of that,” Hewson wrote. “It’s also a timely reminder to investors to never assume anything when it comes to financial markets and more importantly human incentives.”
The 10-year Treasury note yield /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y +3.60% briefly fell to around 1.50%, helping to create a runway for technology stocks that tend to be sensitive to bond yields.
U.S. stock indexes have been mostly advancing in the past month, seeing record highs, driven by evidence of improvement in the economy and by strong results from American corporations reporting first-quarter earnings.
S&P 500 index company earnings are now estimated to have increased 50.4% in the first quarter from a year ago, which would be the highest growth rate since the first quarter of 2010, according to Refinitiv data.
Shares of tech companies, in particular, had taken it on the chin after prospering during the lockdown protocols in place last year to combat the coronavirus pandemic. Investors have been rotating their investments into assets seen as performing better during the economic recovery, including energy, financials, industrials, materials and transportation stocks.
Meanwhile, the healthcare sector remains in focus after President Joe Biden’s administration has advocated waiving intellectual property rights to potentially enable companies in developing countries to manufacture their own COVID vaccines. Companies like Pfizer, /zigman2/quotes/202877789/composite PFE +1.32% AstraZeneca /zigman2/quotes/200304487/composite AZN +1.78% , BioNTech /zigman2/quotes/214419716/composite BNTX +5.69% Johnson & Johnson /zigman2/quotes/201724570/composite JNJ +0.42% and Moderna /zigman2/quotes/205619834/composite MRNA +4.42% have seen their stocks fall as a result this week.
Pfizer and its German partner BioNTech SE also said Friday they have initiated submission of a Biologics License Application (BLA) with the U.S. Food and Drug Administration for full approval of their COVID-19 vaccine in individuals 16 years of age and older.
Which companies are in focus?
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Shares of Cigna Corp . CI gained 1.7% Friday, after the health-services company reported first-quarter profit and revenue that rose above expectations, as total customer relationships grew 14% and pharmacy customers increased 28%.
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USA Today parent Gannett Co. Inc. GCI reported Friday a wider net loss on revenue that fell more than some analysts expected, citing negative impacts from the COVID-19 pandemic as well as “general trends” hurting the publishing industry. Shares fell 0.9%.
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Spectrum Brands Holdings Inc . SPB posted stronger-than-expected earnings for its fiscal third quarter Friday, and raised its fiscal 2021 guidance. Its shares climbed 3.4%.
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Shares of DraftKings Inc. DKNG declined nearly 7% Friday, after the sports betting company reported a first-quarter loss that more than quadrupled and was wider than expected, but revenue that nearly tripled to beat forecasts and raised its full-year outlook.
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Bank stocks staged a turnaround after initially slumping Friday, as Treasury yields sank in the wake of disappointing government jobs data. Shares of JPMorgan Chase & Co. /zigman2/quotes/205971034/composite JPM +3.31% , Bank of America Corp. /zigman2/quotes/200894270/composite BAC +3.39% , and Citigroup Inc . /zigman2/quotes/207741460/composite C +7.56% , all closed higher, while Wells Fargo & Co. /zigman2/quotes/203790192/composite WFC +3.55% finished down 0.2%. The SPDR Financial Select Sector ETF /zigman2/quotes/209660484/composite XLF +2.68% closed up 0.5%.
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Jefferies upgraded shares of the new Tilray Inc. TLRY to buy from underperform on Friday, and said the recent merger of the company with rival Aphria Inc. Shares closed up over 14%.
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Shares of Roku Inc. /zigman2/quotes/205087179/composite ROKU +4.72% jumped 12% Friday after the streaming company l ate Thursday delivered better-than-expected results for its first quarter and issued an upbeat outlook for the current period.
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Shares of Nikola Corp . /zigman2/quotes/208704275/composite NKLA +3.81% rallied 13.4% Friday, helping the stock to snap a 8-session losing streak, after the electric vehicle maker reported a narrower-than-expected first-quarter loss while reporting no revenue, which was in line with forecasts.
How are other assets faring?
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In Europe, the Stoxx Europe 600 SXXP closed 0.9% higher and London’s FTSE 100 UKX advanced 0.8%.
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The 10-year Treasury note yield TMUBMUSD10Y added 1.5 basis points to 1.576%.
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The greenback slumped 0.8% lower, based on the ICE U.S. Dollar Index DXY .
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Gold futures GC00 added $15.60, or 0.9%, to settle at $1,831.30 an ounce, on Comex, marking its highest finish in three months . U.S. crude futures CL.1 lcrude for June delivery tacked on 19 cents, or 0.3%, to settle at $64.90 a barrel on the New York Mercantile Exchange, leaving front-month prices for the U.S. benchmark up 2.1% for the week on the New York Mercantile Exchange.
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In Asian trade, Hong Kong’s Hang Seng Index HSI edged 0.1% lower. China’s Shanghai Composite SHCOMP closed 0.7% lower, while Japan’s Nikkei 225 NIK rose less than 0.1%.
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