By the close of trading last week, each of the major stock benchmark indexes posted solid gains following the previous week’s sell-offs. Strong earnings reports, encouraging employment data, and hopes for more economic stimulus bolstered investors’ confidence. The Russell 2000 resumed its 2021 surge, gaining 7.7%. The Nasdaq advanced 6.0%, followed by the Global Dow, the S&P 500, and the Dow. Bond prices slid, pushing Treasury yields higher. Crude oil prices continued to climb, increasing by 9.0% on the week. Crude oil prices are already up nearly 17.5% year to date. The dollar crept higher while gold prices continued to fall.
Last Week’s Economic News
- While January’s employment figures were better than December’s, the labor market continued to reflect the impact of the pandemic. Only 49,000 new jobs were added in January after losing a whopping 227,000 jobs in December. The unemployment rate dropped to 6.3%, and the number of unemployed persons declined by 606,000 to 10.1 million. Although both measures are much lower than their April 2020 highs, they remain above their pre-pandemic levels in February 2020 of 3.5% and 5.7 million, respectively.
- Manufacturing slowed in January, according to the latest Manufacturing ISM® Report On Business®.
- According to the Services ISM® Report On Business®, the services sector expanded in January.
- Data on the international trade in goods and services deficit for December 2020 was released on February 5. The trade deficit declined 3.5% to $66.6 billion.
Eye on the Week Ahead