Jakarta, CNBC Indonesia – The United States (US) stock market opened higher on Friday (6/8/2021), welcoming the employment data as of July which showed a positive surprise.
The Dow Jones Industrial Average jumped 100.6 points (+0.3%) at 08:30 local time (20:30 WIB) and 30 minutes later to 126.75 points (+0.36%) to 35,191. The S&P 500 was up 6.65 points (+0.15%) at 4,435.75. However, the Nasdaq was down 38 points (-0.26%) at 14,857.13.
US employment data showed that the world’s largest economy created new jobs for 943,000 people in the past month, far better than economists in a Dow Jones poll had expected of 845,000.
On the other hand, the unemployment rate fell to 5.4% or below the market estimate of 5.7%. The news made bank shares soar. JPMorgan, Bank of America and Wells Fargo rose more than 1% at the open.
Manufacturing, retail and energy stocks also rose. In contrast, technology stocks such as Apple and Amazon fell as defensive stocks fell, such as utilities and healthcare.
“This will greatly strengthen the direction of the Fed which previously announced it would run tapering [pengurangan pembelian surat berharga],” said James McCann, Deputy Chief Economist at Aberdeen Standard Investments, in a research report cited by Reuters CNBC International.
Fed Chairman Jerome Powell, he continued, is likely to announce policy tapering in a meeting in Jackson Hole this month, having previously stated that the employment data will be the cornerstone for tightening monetary policy.
The employment data also triggers investors to shift funds from low risk, such as bonds, to assets that are less risky high risk high return like stock. Yield (yield) 10-year tenor bonds rose to 1.28% (from the position at the beginning of the week 1.13%). The yield moves in the opposite direction of the price.
Previously, claims for unemployment benefits last week were recorded at 385,000, or in line with expectations. Wall Street closely monitors today’s labor data because it becomes the reference for the US central bank (Federal Reserve / The Fed) in determining its policy going forward.
Several issuers that will release their financial performance for the second quarter of 2021 today include Norwegian Cruise Line and Goodyear Tire. According to Refinitiv data, as many as 427 issuers that are constituents of the S&P 500 index have released their financial performances, with 88% of them scoring net incomes above estimates, while 87% scored earnings above expectations.
On Thursday, the S&P 500 index gained 0.6% to hit a new record high. The Dow Jones rose 271.58 points (+0.78%) while the Nasdaq added 0.78% for its fourth straight day of rally. During the week, the Dow Jones was up 0.4%, while the S&P 500 and Nasdaq were up 0.77% and 1.5%, respectively.
CNBC INDONESIA RESEARCH TEAM
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