Stocks opened slightly higher on Monday, took a dip in the early minutes of trading, but by 11 am all three indexes were climbing. No major data releases are scheduled for today but early trading suggests investors are optimistic about the monthly employment and manufacturing figures to be released in the coming days.
Roughly 90 minutes into the session, the S&P 500 has climbed 0.80% to 926, building on top of the most rapid three-month gain in seven decades. The Dow is performing even better with a 0.99% advance to 8522, and the Nasdaq is up 0.32% to 1844.
Meanwhile, the 10-year yield is up one-tenth to 3.48%, and the U.S. dollar has made broad-based gains from the overnight.
With the second half of the year just beginning, many analysts have become convinced the worst of the recession is over.
“It is looking more like the economy has hit bottom,” said BTMU economist Ellen Zentner in a morning note. “Unemployment claims peaked at the end of March and now the other data are starting to show signs of flattening out after declining sharply in the last quarter of 2008 and first quarter of 2009.”
Rather than looking all the way back to the Great Depression, Zentner said the current crisis more closely resembles the early 80s.
“Unemployment over the 1980 and 1981-82 recessions rose 5.2 percentage points to 10.8% in November 1982 which is similar to the labor market stress in this recession with the unemployment rate rising 5.0 percentage points from 4.4% in March 2007 to 9.4% in May 2009,” she said.
Key releases later in the week include the June employment figures, which are expected to show another 350k jobs vanishing in the month, pushing the unemployment rate up two-tenths to 9.6%. The ISM manufacturing index will be the key index on Wednesday, as investors look for signs that a global recovery for exports is on the horizon.