U.S. stocks rallied to fresh record highs on Friday, 5th November 2021, following a stronger than expected jobs report that showed 531,000 jobs were added in October and a revised gain of 312,000 in September.
Payrolls in the prior two months saw substantial revisions, up by nearly 250,000.
Hiring was broad-based, led by leisure and hospitality.
All three major market indexes closed at new all-time highs.
Pfizer said that the interim data showed its COVID-19 pill has reduced the risk of hospitalization or death by 89%, which boosted classic reopening plays such as airlines and cruise ships.
The positive momentum carried over from the Fed’s signal this week that inflation is “transitory” and likely would not require a fast rise in interest rates.
For the week, the S&P 500 gained 2%, pushing its year-to-date gains to 25%. The Dow added by 1.4%, and the Nasdaq rallied by 3.1% for its best weekly showing since April.
Here are the closing levels on Friday: –
This Bloomberg report shares that professionals and big institutions are paying a decent premium to hedge the S&P 500 Index. This could probably mean that they are happy to be long and may even add knowing that they will be protected if there is a selloff.
With a new record high in S&P every day of the week, it has been a good performance indeed.
The risk appetite is strong and there is momentum behind the rally.
With the retails army back, Institutions have no better alternative to put money to work, and short sellers will be licking their wounds.
During this interval, you would not want to be standing in front of a moving train even though more and more people are saying that the market is complacent.
In the event we see some retracements or pullbacks, it would probably be met with buying on the dips.
For now, the market is happy to be long, and it is hard to call a top with the momentum so strong. Happy days ahead.
Source: CBOE, Reuters, Bloomberg
This commentary is written by James Gomes
James has been in the finance industry for over 30 years and most recently worked for a large US bank for more than 20 years.
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