Stocks reacted to a strong jobs data thus pushing the S&P 500 and the Nasdaq to record highs and prompting new talks of an earlier interest rate hike from the Fed.
Banks including JP Morgan Chase, Bank of America and Citigroup all show an uptick on the expectations of an inevitable increase in rates by the feds.
“My expectation for the S&P 500 has been pretty similar throughout the year. I expect you will get the dividend yields. That is around 2 percent. You will get whatever earnings per share growth the stocks are able to generate. My expectation is that is going to be another 4 to 5 percent. So you are looking at a return of anywhere from 5 or 6 percent on the S&P 500 this year,” Michael Arone, Chief Investment Strategist, reportedly told Reuters.
Labor market data showed marked improvement for the second straight month. Nonfarm payrolls rose 255,000 in July- far exceeding forecasts of 180,000.
The unemployment rate, at 4.9 percent, remains just below the 5 percent mark associated with full employment.
Nigel Belle, Readers Bureau, Fellow
Edited by Jesus Chan
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