Stock Market Struggling, Jobs Report to Be Released this WeekDaniel McCarthy (Author) Published Date : May 04, 2015 01:01 IST
The stock market in the U.S. has struggled to find direction lately, but the payroll report this week could confirm if the recent weak data and stock prices are waning or it is the start of a trend for the long term. Over the last two weeks, the S&P 500 Index has moved 17.78 points per day on average, wider than the point range of 12.42 during the early part of March. The swings were amplified due to mixed signals on the economy.
While earnings during the first quarter have topped most expectations, revenue has dropped, with the largest drops across the energy sector.
Data from the U.S. has shown that economic growth has been weak overall, which is seen as making it less likely for the Federal Reserve to raise the interest rates any time soon, a view, which has helped to lift the sentiment in the market.
In a week that is rare where both bonds and stocks weakened, traders might reconsider if global yields will drop much further, due to the yield in Germany running under zero since August of 2014. As yields across much of Europe rose last week, the benchmark rates in the U.S. followed suit. Investors have left the safe haven of the bond market for large returns in the stock market, but the bond market last week experienced a sell off that boosted yields, which is why some of the biggest losers last week included consumer staples businesses and utilities that pay out higher dividends.
There has been some movement in the debt talks in Greece and regional data on inflation last week was less worrisome which caused traders to lower their bets that the European Central Bank may have to inject more into its stimulus package.
Reactions by investors were to dump U.S. Treasuries, British Gilts and German Bunds.
It is estimated that 213,000 new jobs were added during April in the U.S. after only 126,000 new ones were added in March.
Stock Market Struggling, Jobs Report to Be Released this Week