The stock market came out swinging today for a second straight September session despite little news to justify the optimism.
While the Centers for Disease Control and Prevention extended an eviction moratorium through the end of the year, sparing millions of renters, the economy doled out several warning signals. For one, ADP's private-sector jobs report showed just 428,000 payroll additions in August, far less than the 1 million expected.
"On the plus side, the August reading still showed a month-over-month increase of 216K payrolls," says Nick Juhle, director of investment research at $14B trust-only bank Greenleaf Trust. "On the downside, the ADP estimate was lower than the (Bureau of Labor Statistics) estimate for Friday and it still missed. This could either suggest that we are in for a light report on Friday or further highlight the recent divergence in outcomes from the two sources.
"Either way, hiring has slowed significantly since the initial snapback in May and June. The labor market rebound remains gradual with unemployment well above pre-pandemic levels, and significant headwinds remain."
Meanwhile, the Federal Reserve's latest "Beige Book" survey of the economy further illustrated a slowing recovery. "Continued uncertainty and volatility related to the pandemic, and its negative effect on consumer and business activity, was a theme echoed across the country," the report reads.
And the Congressional Budget Office revealed the U.S. will run an all-time-high $3.3 trillion deficit for the fiscal year ending Sept. 30, with U.S. debt set to exceed GDP in 2021 for the first time since World War II.
But none of that snuffed stocks' momentum. The Dow Jones Industrial Average shot 1.6% higher to 29,100 to come within 451 points of its February highs. The Dow's advance was led by Coca-Cola (KO, +4.2%) and International Business Machines (IBM, +3.9%).
Other action in the stock market today:
The S&P 500 surged 1.5% to a record 3,580.
The Nasdaq Composite gained 1.0% to a record 12,056.
The small-cap Russell 2000 improved by 0.9% to close at 1,592.
The Few Cheap Stocks Left
Naturally, when stocks get this high into the clouds, it becomes more difficult to find a few things.
Sufficient yields, for instance, are a rarity at this point. The S&P 500's yield has dipped below 1.7%, and the Dow barely delivers above 2%. But investors have a few high-income options to mull over, including these seven stocks with safe payouts, and, for those who like to diversify, these five high-yield ETFs.
It also might seem difficult to find a decent value at these breathtaking heights. For instance, while the exact data differs depending on the data provider, the S&P 500's value compared to forward-looking earnings is at levels last seen during the early aughts.
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But the split nature of this market means hundreds of stocks haven't participated nearly as fully in the rally of the past few months – in fact, several values still exist.
Here, we evaluate 11 value stocks that not only are trading at lower-than-usual multiples, but boast several other qualities, such as steady (and even rising) dividends, strong cash generation and positive analyst expectations.