US economy lost 140,000 jobs in December
New York (CNN Business)Bad news is good news again on Wall Street. Stocks rose at the opening bell Friday to hit more new records — despite the fact that the United States government reported a surprise loss of 140,000 jobs in December.
Why? The weak numbers highlight the need for more stimulus from Washington.
The Dow, S&P 500 and Nasdaq were all up in early trading as investors seem to be betting more help will soon be coming. Joe Biden will be inaugurated in less than two weeks and Democrats now control the Senate as well as the House following this week’s Georgia run-off elections.
“The ongoing battle against the pandemic is putting pressure on the real economy once again,” said Charlie Ripley, senior investment strategist for Allianz Investment Management, in an email to CNN Business, “and despite what financial markets are signaling, the labor market is indicating there is still a ways to go on the economic road to recovery.”
“The ability for Congress to provide additional fiscal support has increased and today’s employment report simply beckons them to do so,” Ripley added.
Hopes are also growing for a recovery in the economy as well as corporate earnings later this year, as more people are likely to get one of the Covid-19 vaccines from Pfizer (PFE) and BioNTech (BNTX) or Moderna (MRNA).
“Investors are already looking through this temporary period of economic weakness and instead focusing on the brighter outlook where fiscal spending, monetary stimulus and mass distribution of the COVID-19 vaccines together ensure the US economy quickly returns to its pre-pandemic path,” said Seema Shah, chief strategist at Principal Global Investors, in a report Friday.
The economic recovery hopes are a likely reason why bond yields are bouncing back too. The yield on the US 10-year Treasury recently rose above 1% for the first time since March and inched higher after the jobs report as well.
Can anything stop Tesla and Elon Musk?
In other market news, Tesla (TSLA) shares continued their electrifying run, rising another 4% Friday. Elon Musk’s car company has soared more than 20% already in 2021. The company is worth more than $800 billion, topping the market value of Facebook (FB).
Tesla is now the fifth most valuable company in the S&P 500, trailing only Apple (AAPL), Microsoft (MSFT), Amazon (AMZN) and Google owner Alphabet (GOOGL).
Shares of Social Capital Hedosophia Holdings Corp. V, a so-called blank check special purpose acquisition company, rose about 10% Friday after soaring nearly 60% Thursday on the news that online lending firm SoFi plans to merge with it in order to go public.
The deal values SoFi at nearly $8.7 billion.
And bitcoin (XBT) continued to grind its way higher as well. The cryptocurrency, which topped $40,000 for the first time Thursday, is now worth nearly $42,000.
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