Stocks Rise as Investors Focus on Trailing Economic Developments

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Stocks rose Wednesday as jobs numbers showed a gain for June but disappointed against estimates and Dr. Fauci issued an ominous warning on the coronavirus pandemic. 

All three major U.S. indices were either flat or up, with the tech-heavy Nasdaq trailing. The S&P 500 rose as much as 0.55%. The 10-Year Treasury yield rose to 0.69%. Yields rise when prices fall. 

The ADP jobs report showed that the U.S. economy added 2.37 million jobs in June against economist’s estimates of 3.5 million. That may be a disappointment, but investors are happy to see a gain. Economists are hoping the unemployment rate moved from 13.3% in May to 13% in June. 

For more validation that the economy is indeed recovering quickly from the virus-induced recession, FedEx  (FDX) - Get FedEx Corporation Report shares rose 15% to $162 after the global delivery company put revenue and earnings estimates to shame Tuesday after the market close, showing that business and household demand for goods is on a strong path, even through the company’s revenue declined for the quarter, as expected. 

But looking forward, reopenings in the U.S. aren’t a sure bet. The 5-day moving average of new daily coronavirus cases in the U.S. hit 44,000, just under a record high set days ago, according to data from Johns Hopkins. Dr. Fauci says daily new infections could hit 100,000 if the U.S. continues its current handling of the situation. Current levels are already causing 12 states to pause reopenings. 

“The US indices extended their advance, as investors chose to concentrate on improving and mostly better than expected economic data rather than the alarming rise in Covid-19 cases in the U.S. and warnings that the situation may be getting out of control,” wrote Ipek Ozkardeskaya, senior analyst at Swissquote Bank in emailed remarks to reporters. 

Cyclical sectors like consumer discretionary, oil, banking and industrials were leading the up-market. 

Other developments out soon Wednesday that may move the market are the ISM manufacturing result and the Federal Reserve’s June minutes to be released at 2 pm.  

Apple  (AAPL) - Get Apple Inc. (AAPL) Report said it’s asking suppliers to cut production for its next-gen iPhones, as reports of worse-than-expected 5G demand have surfaced. The stock was up 0.2%.

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