Market week: Stocks gain on slower job growth

Easy-money policies likely to be extended on employment concerns

Investors bid up the big blue-chip indexes as a less-than-stellar U.S. job creation report tempered concerns that the U.S. Federal Reserve Board would begin tightening monetary policy this year to head off rising inflation as the economy recovers. The Department of Labor reported that the U.S. economy created 266,000 new jobs in April, compared with analysts’ expectations of up to 1 million additional jobs. The U.S. unemployment rate ticked up to 6.1% from 6%.

From two consecutive months of solid job gains, the Canadian economy shed 207,000 jobs in March as a third wave of Covid-19 infections forced provincial governments to implement full lockdowns and closures of non-essential businesses. The infection rate was exacerbated by the federal government’s inability to provide sufficient vaccines in a timely manner, leading to extreme rationing among the provinces. The national unemployment rate jumped to 8.1% in April from 7.5% in March.

The S&P 500 Composite Index closed at a fresh record high on Friday, advancing 1.2% on the week. The Nasdaq Composite Index lagged, retreating 1.5% on the week, as investors continued to rotate out of growth stocks (with tech issues taking the brunt) and into value-oriented sectors seen as benefitting from economic recovery, such as industrials, materials, energy, financials, and transportation. Toronto’s S&P/TSX Composite Index also benefitted from this trend, gaining nearly 2% on the week, TSX heavyweight energy and financial sectors posted strong advances on the week. Crude oil gained 2.1% on the week, while gold jumped 3.6%.

Monitor the main stock and commodity indexes daily with the Fund Library’s interactive Markets Page.

Fund news

* Evolve debuts tech titans ETF. Evolve Funds Group Inc. on May 6 launched its Evolve FANGMA Index ETF (TSX TECH) in both hedged and unhedged units. The fund tracks the Solactive FANGMA Equal Weight Index Canadian Dollar Hedged Index of six equally-weighted technology titans: Alphabet Inc.; Amazon Inc.; Apple Inc.; Facebook Inc.; Netflix Inc.; and Microsoft Corp.

@FundLibrary – Follow Fund Library on Twitter for daily information and updates.

Disclaimer

© 2021 by Fund Library. All rights reserved. Reproduction in whole or in part by any means without prior written permission is prohibited.

The foregoing is for general information purposes only and is the opinion of the writer. No guarantee of investment performance is made or implied. It is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice.