It was redemption day for U.S. investors as stocks surged ahead, snapping their four-day losing streak. The rally came after U.S. non-farm payrolls data came in better than expected. Although the uptick may be cause for celebration, many investors remain wary since the unemployment rate actually rose to 8.3% in the month of July. Sensing the labor market’s fragility, investors now turn to the Fed to take additional action to further stimulate economic growth. Despite the market’s understandable skepticism, U.S. equities pulled ahead: the Dow Jones Industrial Average jumped 1.7%, its biggest increase since June, while the S&P 500 rose 1.9%, and Nasdaq came out on top with a 2% gain [see also 3 Reasons Why Mexico Is The New Brazil].
In other economic news, Euro Zone retail sales declined in June, but less than the expected 1.9% decrease. On the commodities front, oil futures had their biggest one day gain in a month today, climbing to over $91 a barrel. Silver and wheat also showed strong gains as commodities across the board rallied on U.S. job gains [see also Roubini Warns Low Commodity Prices Signal Economic Disease].
The Vanguard European ETF (VGK) was one of the best performers today, gaining an incredible 4.50% during the session. Strong U.S. jobs data helped European stocks trade higher. In response, VGK gapped significantly higher at the open, only to inch higher throughout the day. VGK settled just below its high of $44.19 per share [see also Seven Simple & Cheap ETF Model Portfolio].
The Barclays iPath S&P 500 VIX Short-Term Futures ETN (VXX) was one of the worst performers, shedding a dismal 6.68% on the day. Increased confidence after positive U.S. jobs data was announced helped market volatility to cool off, forcing this ETF to gap significantly lower at the open, and slide sideways throughout the remainder of the trading day [see ETF Technical Trading FAQ].
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Disclosure: No positions at time of writing.