Stocks rallied on Friday for another up week, closing at a new record, US markets were +0.96% and international equities were up by 0.80%. Bond fell by 0.43% on a strong employment report.
Nonfarm payrolls were up by 943,000 in July, the best gain in 11 months. The unemployment rate fell to 5.4% from 5.9% in June. 261,000 workers entered the labor force, another positive sign. The surveys were done before the big Delta variant surge started in mid-July, but they do indicate there was a lot of momentum in the economy going into it. The Delta surge though is starting to reach frightening levels in some areas. In Austin, Texas, a city of 2.4 million, there are just six ICU beds left as of this morning. On Saturday there were 102 people on ventilators compared to four on July 4th. The City’s health department asked residents to stay home and mask up even if they have had the vaccine. Houston, with a population of 6.7 million, had 41 ICU beds available. Florida posted a one-day record for Covid cases on back to back days, on both Friday and Saturday.
With the never-ending rally, some investors are starting to figure the bulk of the rally is in the past, but don’t expect a big market drop either, therefore moving into buy-write funds that tend to prosper in a go-nowhere market. The strategy attracted $1 billion in new inflows in July, the most since 2012, according to Barclays.