Saturday, 4 May 2019

Markets jump with US employment, “buy stocks even at new highs”

Markets rose on Friday. The S&P 500 rose 1.0 percent while the STOXX Europe 600 rose 0.4 percent.

Markets were boosted by a report showing that the US economy added 263,000 new jobs in April. The unemployment rate fell to 3.6 percent, a 49-year low.

“This is another loud and clear signal that the economy is in really good shape,” wrote Mike Loewengart, vice president of investment strategy at E*Trade Financial Corp.

Fed Vice Chairman Richard Clarida said in a speech that the US economy “is in a very good place” with low unemployment and “muted” inflation.

“Solid jobs gains shows U.S. resilience and further strengthens case to buy stocks even at new highs,” said Thomas Lee, co-founder of Fundstrat.

Still, Bob Pisani at CNBC had suggested earlier on Friday that stocks are getting pricey, with the forward earnings multiple for the S&P 500 over 17 when the historic norm is 15 to 16, and could be hitting resistance.

“A lot of things have to go right for the market to keep going up,” UBS’ Art Cashin was quoted as saying.

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