Marketbites: Core American Labor Force is Back
Portfolio Manager Commentary:
The Dow Jones Industrial Average rose Monday, notching its longest winning streak since February 2017, to kick off a busy week of key earnings reports and a major policy decision from the Federal Reserve. Meanwhile, the S&P rose 0.40% and the Nasdaq gained 0.19%. Energy stocks led gains in the S&P 500, with the sector up about 1.7% after oil and gasoline futures touched a three-month high Monday. Chevron rose nearly 2% after the oil giant reported preliminary second-quarter adjusted earnings Sunday that topped analysts’ estimates.
“So far, there’s no evidence of a recession. So as long as there’s no evidence of recession, and I think the market will probably continue to melt up; people are chasing,” said Steve Eisman, senior portfolio manager at Neuberger Berman.
Earnings results are coming from around 150 S&P companies this week, or 30% of the index. Big tech companies including Alphabet, Microsoft, and Meta are a few companies on deck. Companies in the big pharma, industrial, and oil are also having a big week. Traders will also watch for the personal consumption expenditures index, the Fed's inflation gauge, at the end of this week.
Chart of the Day:
The core of the American labor force is back. Americans between 25 and 54 years of age are either employed or looking for jobs at rates not seen in two decades, a trend helping counter the exodus of older baby boomers from the workforce. In the first months of the pandemic, nearly four million prime-age workers left the labor market, pushing participation in early 2020 to the lowest level since 1983—before women had become as much of a force in the workplace. Prime-age workers now exceed pre-pandemic levels by almost 2.2 million.
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