A view of the fearless girl wearing a mask in front of the New York Stock Exchange in New York City USA during coronavirus pandemic on April 25, 2020.
John Nacion | NurPhoto | Getty Images
U.S. stock futures rose on Sunday night following last week’s sharp gains amid optimism over the economy reopening.
The Dow surged 6.8% last week while the S&P 500 jumped 4.9%. The Nasdaq Composite climbed 3.4% and closed at record levels for the first time since Feb. 19. The tech-heavy Nasdaq was the first of the three major indexes to trade back at all-time highs since the coronavirus pandemic shuttered the global economy.
A large portion of those weekly gains came Friday, when equities skyrocketed on the back of a surprise surge in U.S. employment. The Labor Department said Friday the economy added 2.5 million jobs in May, a record. Economists polled by Dow Jones had forecast a drop of more than 8 million.
“The 2.5 million rebound in employment last month reverses only a small fraction of the jobs lost since February,” said Michael Pearce, senior U.S. economist at Capital Economics. “But considering we and the consensus had been braced for another large decline, it builds on the signs from some of the other macro data this week that economic activity is rebounding faster and more vigorously than we had anticipated.”
Friday’s report came as states continued their reopening processes. All 50 states have eased quarantine restrictions to some degree, with restaurants and other businesses resuming operations in some states.
Data compiled by OpenTable shows restaurant bookings across the U.S. are now 80% below last year’s levels. In April, bookings were down 100%. Hotel occupancy rates, home purchases and U.S. air travel have also started to rise.
Expectations of a swift economic recovery has sent stocks flying since hitting lows on March 23. In that time, the S&P 500 has rallied more than 45% while the Dow has gained over 48%.
“It appears that the most rapid bear market in history has been followed by the most dramatic recovery in history,” wrote Marc Chaikin, CEO of Chaikin Analytics. “While COVID-19 cases are still growing in certain states, particularly outside of densely populated urban areas, investors see the glass as half-full and are looking ahead 12-18 months.”
Stocks that benefit the most from the economy reopening have led the charge higher for the broader market.
JPMorgan Chase and Citigroup are both up more than 23% quarter to date while Hilton Worldwide is up 27.8%. American Airlines shares are up 52.5% in that time while Delta and United have gained 19.7% and 34.4%, respectively.
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