U.S. equity markets continued to gain during the first week of July. On July 3, the last trading day of the week, the Dow Jones Industrial Average reached 17,000 in intraday trading and closed at 17,068.26 for the day. The DJIA was up 0.54% for the day and gained 1.28% for the week.
On July 3 the S&P 500 also reached a new high ending the day at 1,985.44. The S&P 500 was up 0.55% for the day and 1.25% for the week.
Increased valuations were fueled by strong U.S. employment data on the upside of economists’ consensus estimates. The June ADP National Employment Report released on July 2 stated an increase of 281,000 nonfarm payroll jobs in the private sector. This was far above the consensus range by economists of 190,000 to 240,000.
Strong June employment growth in the private sector was further supported by a strong Bureau of Labor employment report released on Thursday, July 3. The Bureau of Labor Statistics reported a June increase of 288,000 U.S. nonfarm payroll jobs. The report also stated a decrease of 0.2% in the unemployment rate which is now at 6.1%. The June data release was on the high-end of economists’ consensus range estimate of 199,000 to 290,000 and exceeded economists’ expectations for the unemployment rate which was estimated at 6.2% to 6.3%.
As predicted, summer weather has helped improve productivity and the overall outlook on hiring. Government hiring in June also contributed to the topline gain adding 26,000 jobs.
Strengthening valuations in the DJIA continued to show in Industrials as Caterpillar (CAT) gained 1.53% on July 3. Exxon Mobil (XOM), Goldman Sachs (GS) and United Health (UNH) also led the DJIA higher on Thursday, July 3 with daily returns of greater than 1%.
In the S&P 500 top performing sectors included Consumer Discretionary, Industrial and Financial. In July 3 trading the Consumer Discretionary sector gained 1.27% followed by the Industrial sector which was up 0.83%. The Financial sector also showed a strong return in the final trading day of the week up 0.74%.
Few major economic releases are scheduled for the week beginning July 7. The most significant report for the week will be the FOMC Minutes released on Wednesday, July 9. The FOMC Minutes will provide greater insight from the FOMC on the U.S.’s economic situation.