Day Traders Diary

12/4/20

The major averages rose to record levels on Friday, notching another weekly advance, as traders shook off a disappointing U.S. jobs report. The Dow Jones Industrial Average closed higher by 248 points, or 0.8%, at 30,218. The S&P 500 gained 0.9% to end the day at 3,699 while the Nasdaq Composite advanced 0.7% to 12,464. All three of major indexes posted intraday and closing record highs.

Chevron and Caterpillar rose 3.9% and 4.3%, respectively, to lead the Dow higher. Energy was the best-performing S&P 500 sector, gaining 5.4%.

Friday's jump led major averages to for their fourth weekly gain in five weeks. The Dow rose 1% this week. The S&P 500 gained 1.7% over that time period. The Nasdaq Composite rallied 2.2% this week.

The U.S. economy added 245,000 jobs in November. That's well below a Dow Jones consensus estimate of 440,000. The unemployment rate, however, matched expectations by falling to 6.7% from 6.9%.

President-elect Joe Biden also called for more stimulus, noting Friday's report foreshadows a "dark winter." Biden later said it "would be better if they had the $1,200″ stimulus checks, and that he understands "that may still be in play."

JJ Kinahan, chief market strategist at TD Ameritrade, noted the report "was not as bad as it seems" in part because a chunk of the lost jobs came from the U.S. government as the 2020 Census count wrapped up.

Brad McMillan, CIO for Commonwealth Financial Network, also pointed out that average hours worked "remained strong" last month, "suggesting that overall labor demand remains healthy, and the drop in the unemployment rates suggests the labor market continues to tighten."

Friday's report comes as the number of coronavirus cases has been rising sharply. The U.S. reported record numbers on Thursday of new infections, single-day deaths and hospitalizations.

The 2-yr yield decreased one basis point to 0.14%, while the 10-yr yield increased five basis points to 0.97%. The U.S. Dollar Index increased 0.1% to 90.76. WTI crude futures rose 1.3%, or $0.59, to $46.25/bbl.