Thought a record plunge in employment would take stocks down? Not even close. The S&P 500 rallied over 1.5% in the stock market today, while the Nasdaq its highest level since February.
At this point, investors shouldn’t be surprised. We’ve seemingly rallied on every poor weekly jobless claims report, and barely flinched from this week’s negative ADP jobs report or last month’s disappointing labor statistics.
The highly anticipated April’s job report is finally here. While the non-farm payrolls numbers came in a little better than expected, it was still a massive decline. The economy suffered a loss of 20.5 million jobs versus estimates for a loss of 22 million. The unemployment rate hit a whopping 14.7%, but was still better than the estimated 16%.
There is a silver lining here. Of the 20.5 million job losses, 17.8 million workers were on temporary leave. So while there are a lot of people out of work right now, it’s expected to be short-term job losses. Once the economy begins to reopen, not everyone will regain their employment, but there should be a rebound in the labor market as well.
The Week Ahead
Last week it was mega-cap tech. This week it was high-growth stocks. Despite the volatility, earnings will go on.
Movers in the Stock Market Today
Demand for Disney (NYSE:DIS) is in full effect as tickets to Shanghai Disneyland sold out for its reopening. After a three-month shutdown from the coronavirus outbreak, the park will be reopening at 30% its normal capacity — 24,000 people. The opening will involve safety measures such as masks, temperature screenings and social distancing.
Rosenblatt is optimistic on Disney as the company begins reopening some of its retail shops in Florida, too. While the company isn’t opening up those theme parks yet, it’s a step in the right direction.
Tesla (NASDAQ:TSLA) plans to restart its Fremont operations as soon as today. The Fremont plant has been shut down since March 23 due to the pandemic and California Governor Gavin Newsom finally gave the okay for some manufacturers to resume certain operations.
Along with several other retailers, J.C. Penney (NYSE:JCP) isn’t doing so hot. The company is expected to file for bankruptcy as soon as next week. Reportedly, J.C. Penney will close roughly a quarter of its stores. While JCP has been out of its glory days for some time, shares hit a new all-time low on Friday near 16 cents.
Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) announced that most of its employees will continue to work from home until 2021. This could become a common practice for the next few months with several companies. Even though Facebook (NASDAQ:FB) offices will eventually begin to reopen, the company also said that it will allow most of its employees to work from home until next year if they choose.
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