New T-Mobile Has Arrived

By Nicholas Jasinski |  Thursday, August 6

Drift Up. The path of least resistance for stock indexes in recent days has been higher. Second-quarter earnings reports have been coming in stronger than expected. Global economic data has been improving less-quickly than it was a month ago, but is still generally moving in the right direction. News about fiscal stimulus negotiations on Capitol Hill continues to emerge in dribs and drabs. And the steady tailwind of supportive monetary policy remains in place.

There has been nothing to challenge the prevailing narratives on any of those fronts lately, and their net impact remains positive for the market. Accordingly, stock indexes again drifted higher today.

The S&P 500 rose 0.6%, the Dow Jones Industrial Average added 0.7%, and the Nasdaq Composite gained 1%. That pushed the tech-heavy index to a close above 11,000 points for the first time.

The latest figures from the U.S. Department of Labor showed that 1.2 million people filed initial claims for unemployment benefits in the week ended Aug. 1, compared with the 1.4 million that economists expected. That broke the past two weeks’ streak of rising figures, but claims remain at a very elevated level—the latest mark would have been a new high before this year. And adding in workers receiving benefits under the Pandemic Unemployment Assistance program, the number is more like 1.6 million, Lisa Beilfuss wrote today.

Investors will pay plenty of attention to tomorrow morning's July jobs report. On average, economists expect a gain of two million jobs last month, compared with 4.8 million in June. The unemployment rate is expected to fall to 10.5%. Matthew Klein has more on what to look for tomorrow.

Congressional wrangling over a fiscal stimulus package continues, with reports that Democrats, Republicans, and the White House remain far apart on a deal. But all sides seem committed to reaching a compromise, and the fact that the market isn’t selling off on the delay suggests investors believe that lawmakers will achieve one. Randy Forsyth discussed the implications of the pending bills in his latest column.

Elsewhere in Washington, lawmakers are discussing an extension to payroll support for airlines that was part of the Cares Act. The current $25 billion in funding expires at the end of September, and several airlines have announced planned furloughs or layoffs after that date. The news sent airline stocks higher on Thursday: Delta Air Lines gained 2.3%, United Airlines Holdings rose 2%, and American Airlines Group added 3.8%. Daren Fonda has more.

In earnings news today, Bristol-Myers Squibb, Hilton Worldwide Holdings, T-Mobile US, Uber Technologies, ViacomCBS, and Zillow Group were among the companies to report. 

Finally, the price of gold settled at another new high today, up 1% to $2,051.50 an ounce. Steven Sears has an options strategy for those betting on a continued rise.