Inflation and economic growth for the rest of 2021 should be clearer after October jobs report

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A week after stocks hit an all-time high, a host of financial markers coming up this week will help define the state of the US economy at the end of the year.

The October employment report will be released by the Labor Ministry on Friday. Medical giants Pfizer and CVS Health will release their results on Tuesday and Wednesday, respectively. Also coming this week is the Institute for Supply Management’s October Services Sector Index. This sector represents the bulk of economic activity and was disrupted by the wave of COVID-19 cases at the end of the summer.

Significant recent growth among companies in the S&P 500 has already been reported, suggesting that the economy is moving in a positive direction as the country tries to extricate itself from the grip of the pandemic.

However, inflation remains a concern for many Americans who have seen rising costs everywhere from groceries to big box merchants.

The September jobs report was also well below expectations. Non-farm jobs increased by 194,000 in the month, more than 300,000 jobs below projections. At the same time, the unemployment rate fell to 4.8% from 5.1%, continuing an uncertain period for the economy.

For more Associated Press reporting, see below.

Shares hit an all-time high to end last week. Markets are expected to react to new economic indicators this week, including the October jobs report.
Spencer Platt / Getty Images

Stocks faltered in afternoon trading on Wall Street on Monday and hovered around the records they set last week.

The S&P 500 was up 0.1% at 3:27 p.m. EST after fluctuating between small gains and losses. The Dow Jones Industrial Average rose 48 points, or 0.1%, to 35,867 and the Nasdaq rose 0.4%. All three indices are set to hit other all-time highs.

Smaller company stocks largely outperformed the market as a whole, a sign that investors were confident about economic growth. The Russell 2000 rose 2.4 percent.

More than 65% of S&P 500 shares rose, led by energy companies as the price of U.S. crude oil rose 0.6%, adding to a gain of more than 75% so far this year. Exxon Mobil rose 1.8%. A mix of firms that depend on direct consumer spending for goods and services accounted for a significant portion of the index’s gains. Tesla jumped 7.1% and Starbucks 3.6%.

Losses at tech, communications and healthcare companies helped contain the S&P 500’s gains. Microsoft fell 0.9%, parent company Google Alphabet slipped 2.9%, and UnitedHealth Group slid fell 1.5%.

Bond yields have risen and have helped banks make gains as they rely on higher yields to charge more lucrative interest rates on loans. The 10-year Treasury yield rose to 1.57% from 1.55% on Friday night. Capital One rose 1%.

Each major index hit record highs on Friday to cap the broad market’s best month in nearly a year. Stocks have been gaining ground for weeks as investors examine a steady stream of mostly encouraging corporate earnings.

More than half of the companies in the benchmark S&P 500 have already published results. Analysts expect overall profit growth of 36% by the end of the report. 167 other companies in the index will publish their results this week.

Rising inflation remains a concern and is likely to be persistent, but will likely moderate through the end of the year, said Rod von Lipsey, chief executive of UBS Private Wealth Management. Meanwhile, investors have focused on earnings and other fundamental metrics as they overcome the uncertainty of COVID-19.

“Obviously, we are waiting to see what the Fed has to say, but there is still a lot of room and capacity for the markets to continue this recovery,” he said.


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