DAILY INSIGHTS

Stocks opened solidly higher. Stocks are adding to very strong gains for the week this morning after a strong June jobs report. Markets continue to shrug off the pause in re-openings in response to rising COVID-19 cases and are focusing more on improving economic data and vaccine prospects. European markets are eclipsing US gains in midday trading in London, while China and Hong Kong paced a 1.5% overall gain in the MSCI Asia Pacific Index overnight.

Another strong jobs report. The US economy added 4.8 million jobs in June, well ahead of Bloomberg’s consensus forecast at 3.2 million, while May’s total was revised up by about 200,000 to 2.7 million. The unemployment rate dropped more than 2 points to 11.1% (consensus was 12.5%), while misclassifications around the “absent from work but employed” issue would add only 1 point (compared with 3 points last month). Though a much smaller upside surprise than last month’s shocker, the job market is clearly coming back stronger than most economists expected.

Manufacturing comeback. The Institute for Supply Management (ISM) Purchasing Manager’s Index (PMI) for manufacturing jumped nearly 10 points in June to 52.6, ahead of Bloomberg’s consensus forecasts and in expansion territory for the first time since the pandemic arrived in the United States. The forward-looking new orders component surged, while supply chain pressures eased. The progress is encouraging, but the road to recover lost output is still a long one.

Weekly Market Performance. We’ll wrap up the week with our review of major index performance later today on the LPL Research blog.

July 4 Holiday Schedule. LPL Financial and the stock and bond markets will be closed Friday, July 3, in observance of the July 4 holiday. Please note:

• Daily Market Update will distribute July 2 but not on July 3.
• Weekly Market Performance blog will publish after noon ET on July 2; there will not be a morning LPL Research blog July 2 or any blogs on July 3.

COVID-19 news. On Wednesday, US daily cases surpassed 50,000 for the first time on a 45% week-over-week rise. We hope yesterday’s higher positive test rate of 8.5% is not the start of a trend. (Source: The COVID-19 Tracking Project) More reopenings have been pulled back, and more local governments have mandated masks. On a more positive note, vaccine candidates from Pfizer, with German biotech partner BioNTech, and the University of Oxford showed promising results (Source: COVID-19 Tracking Project).

IMPORTANT DISCLOSURES

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

All index and market data are from FactSet and MarketWatch.

This Research material was prepared by LPL Financial, LLC.

Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC).

Insurance products are offered through LPL or its licensed affiliates.  To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL affiliate, please note LPL makes no representation with respect to such entity.

• Not Insured by FDIC/NCUA or Any Other Government Agency
• Not Bank/Credit Union Guaranteed
• Not Bank/Credit Union Deposits or Obligations
• May Lose Value