fundamental News - DJI5R
Dow futures rose on Sunday evening as Asian shares rallied on Monday while the dollar held near three-month peaks after the U.S. Senate passage of the stimulus bill and a surprisingly strong payrolls report augured well for a global economic rebound.
Futures contracts tied to the Dow Jones Industrial Average added
155 points or 0.5%. Those for the S&P 500 were up 0.4%, while those
for Nasdaq 100 were flat, signaling that a recent underperformance by
tech stocks may continue on Monday.
Market experts expect the economy to grow at about 6% this year,
helped by the mass vaccination programs, reopenings, and fiscal
stimulus.
U.S. Treasury Secretary Yellen had previously tried to counter
inflation concerns by noting the true unemployment rate was nearer 10%
and there was still plenty of slack in the labor market.
February’s surprisingly strong job growth signaled that the economy
could be at a pivot point and is about to enter a hiring boom. As
reported earlier, the economy added 3,79,000 jobs, well above the
210,000 expected, with most of them in leisure and hospitality,
the sector hardest hit when the economy abruptly shut down a year back.
Economists say it would not be surprising to see multiple months now of job growth of at least 500,000.
“I think we are going to see bigger job numbers as we go into the
spring and summer,” said Diane Swonk, chief economist at Grant Thornton.
She expects stronger gains as people regain the ability to congregate
more safely.
“It’s still a long way to go, given what we lost, but the good news is we should see some strong job gains,” Swonk added.
Economists are optimistic about the recovery but remain concerned that variants of the virus could slow it down.
The strength in jobs also gives fodder to both sides of the debate
about the need for the $1.9 trillion stimulus package passed by the
House and now is on the brink of being approved by the senate.
Leisure and hospitality jobs grew by 355,000 in February, with 80%
of those in restaurants and drinking establishments. Still, employment
in that field is down 3.5 million over the year.
The health-care industry added 46,000 jobs, but health care and social assistance are down 909,000 jobs over the year.
Michael Arone, the chief investment strategist at State Street
Global Advisors, said “With the economy reopening, vaccine distributions
progressing and the epidemic put behind us, I think you could have a
real burst in terms of the economy, labor market
and [corporate] earnings over the next nine months or so.”