Stocks are set to open lower this morning as positive sentiment surrounding economic reopening cools. So far, this week has marked a historic start to June, seeing the S&P 500 (SPX) and Dow Jones Industrial Avg. ($DJI) more than 10 percent higher compared to the previous month. The lift in stocks comes as more cities are re-opening for walk-in business, including restaurants and retail, which have felt the largest effects of COVID-related closures.
A test to the current optimism, however, comes on Friday with the release of May’s employment situation. Private payrolls delivered that optimism. Released Wednesday, ADP employment fell by around 2.8 million in May, which came in well below the expected 8.7 million. However, the lagging data may not reflect what’s currently happening. As more businesses rehire furloughed employees to prepare for the emerging foot traffic, the weekly jobless claims may provide a clearer picture moving forward. But after April’s stark drop in nonfarm payrolls along with a nearly 15 percent unemployment rate, investors may need to see some upward direction out of June to continue May’s market momentum.
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