The Dow is now up 1.5% for the week while the S&P 500 and Nasdaq have gained 2.2% and 3.5% respectively over the past five days. The S&P 500 has now rallied for the past seven days while the Nasdaq is on a 10-day winning streak. Both indexes are up about 25% so far this year.
Investors cheered the fact that 531,000 jobs were added in October alone. Previous jobs gains for August and September were also revised higher.
“This was certainly robust. Investors are optimistic that we will get continued strong and even stronger numbers,” said Julian Brigden, co-founder and president of MI2 Partners.
“This does raise questions about how long the Fed can hold the line,” he said, adding that there is a real risk that the central bank may suddenly become more concerned about inflation. “The market may have to factor in more rate hikes.”
But another market expert argued that investors shouldn’t worry about the Fed raising rates too quickly. For one, the Fed still has to finish cutting back on, or tapering, bond purchases. That process has only just begun.
Fed chair Jerome Powell was adamant during a press conference Thursday that he and other Fed members are fully aware that the job market is still not at full employment levels just yet.
“Powell did a masterful job of relieving investor worries that the Fed would act too aggressively following the taper. The market is still feeding off that,” said Mark Luschini, chief investment strategist at Janney.
And any concerns about rate increases in 2022 were overshadowed Friday by more encouraging developments about the global fight against Covid-19.
“Vaccines are a key part of the solution but there has been some vaccine hesitancy,” Solem added. “So having other therapeutics are just as important. Life can return to normal and people can go out to eat, go to gyms and head back to the office.”