Record job losses, investors focused on reopening, Dow up 300

A man wears a mask as he passes the New York Stock Exchange.

Mark Lennihan | AP

U.S. equities rallied on Friday, despite a historic jobs report showing more than 20 million Americans lost their jobs in April, bringing the unemployment rate to a staggering 14.7% due to the coronavirus shutdown. Investors shrugged off the report and focused on the reopenings in some parts of the nation. 

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11:00 am: Siegel says stock market ‘definitely’ already reached virus low 

Wharton School professor Jeremy Siegel told CNBC that the stock market’s March 23 bottom is “definitely going to be the low” from the coronavirus. The longtime bull pointed to the Fed’s response, as well as continued process on treatments or a vaccine for Covid-19, as the reasons for his optimism. Siegel also said on “Squawk Box” that he is paying closer attention to virus data than announcements such as the April jobs report. – Stankiewicz

10:52 am: Berenberg reiterates buy on “top pick” LivePerson as social distancing continues

Shares of conversational commerce and AI software technology company LivePerson are up 50% this week as consumers continue to social distance. Investment firm Berenberg sees a buying opportunity. “We believe the need for social distancing will accelerate the shift toward automation and messaging and away from voice, which bodes well for demand for LivePerson’s platform over the medium term,” the firm said. The company beat on revenue estimates earlier this week. —Bloom

10:20 am: Stocks move higher despite record job losses in April

Stocks opened higher on Friday with the Dow Jones Industrial Average jumping more than 300 points, despite a record number of Americans filing for unemployment in April. Experts say the bounce – which has seen the major averages rebound more than 30% from the March 23 low – can be attributed to a number of factors, including states beginning to reopen their economies, as well as record stimulus measures from governments and central banks. Strategists also note that weakness in areas of the market that have been hardest hit by the pandemic – such as hotel and airline companies – shouldn’t overshadow strength in other areas. Tech stocks, for example, have been a bright spot, and the Nasdaq is now positive for the year. – Stevens

10:15 am: Nearly half of leisure and hospitality jobs vanish in April

Leisure and hospitality employees saw an eye-popping 7.7 million job cuts in April as the U.S. economy clinched a post-World War II record number of employment losses last month. The 7.7 million loss represented 47% of the sector’s total employees. Workers in the food service industry, including waiters, chefs and cashiers, comprised the vast majority of the sector’s employment losses with a decline of 5.5 million. Health care, too, saw a steep decline of 1.4 million as hospitals and clinics paused elective and routine procedures to prioritize preparation for, and treatment of, Covid-19 patients. — Franck

10:10 am: Analyst sees “major investor misconception” about well-positioned Rent-A-Center 

Furniture and electronics rent-to-own store Rent-A-Center was upgraded to buy on Friday by Loop Capital. We believe the stock has sold off over the past few months based on what we view as a major investor misconception about the company—that Rent-A-Center’s skip/stolen losses will skyrocket given the unprecedented rise in jobless claims over the past few weeks, in turn decimating the company’s profitability,” analyst Anthony Chukumba said.” On the contrary, we believe Rent-A-Center is one of the best positioned companies in our coverage universe given its essential retailer status and performance during the Great Recession,” he said. Shares of the company are up 19% this week. —Bloom

9:55 am: Bright spot of the jobs report: 78% of workers say their layoff is temporary

The economy lost more than 20 million jobs in April, but 78.3% of those worker see their layoffs as temporary. The number of employees who saw themselves as temporarily furloughed was 18.06 million, up from 1.84 million in March. “It’s high in a good way. The market could be reacting to that. If you see them move to permanent that’s a problem,” said John Briggs, head of strategy at NatWest. Michelle Meyer, Bank of America head of U.S. economics, called the high number of temporary layoffs a “silver lining” in a bleak report. “With 78% classified as temporarily unemployed, workers should be able to be more seamlessly rehired upon reopening. But time is of the essence,” she wrote in a note. — Domm

9:40 am: March rush to cash supporting stocks now, Yardeni says

Ed Yardeni of Yardeni Research said on “Squawk on the Street” that the dramatic sell-off in March as investors flocked to cash is now supporting stocks despite a historic increase in unemployment. “There’s still like over a trillion dollars that was accumulated during the mad dash for cash during March that’s just sitting there. That still I think provides a cushion for any downside in the market,” Yardeni said. Yardeni pointed to support from the Federal Reserve and market indexes’ increased concentration in big tech stocks as other reasons why the market has rebounded strongly over the past six weeks. —Pound

9:35 am: Here are Friday’s biggest analyst calls of the day: Uber, Constellation Brands, Square & more

  • DA Davidson upgraded Uber to buy from neutral.
  • MKM downgraded Constellation Brands to sell from buy.
  • Guggenheim downgraded Square to neutral from buy.
  • Wells Fargo downgraded Murphy Oil to equal weight from overweight.
  • Jefferies downgraded Nintendo to hold from buy.
  • Macquarie downgraded Hyatt Hotels to neutral from outperform.
  • Susquehanna downgraded Marathon Oil to neutral from positive. —Bloom

9:31 am: Stocks begin with gains after historic jobs report, Dow up 300 points

U.S. equities started the day in the green, as investors shrugged off the jobs report and focused on the economy reopenings. The Dow Jones Industrial Average jumped 320 points. The S&P 500 also rose 1.15%. The Nasdaq Composite — which closed with a positive year-to-date gain on Thursday — ticked up 0.85% after the opening bell. — Fitzgerald 

8:50 am: Why investors are looking past this report

With stock futures gaining on the back of this report, many people are likely confused. Peter Boockvar, chief investment officer of Bleakley Advisory Group, tries to make sense of it for clients. “Bottom line, we can analyze the internals every which way but when the jobs lost were due to a purposeful shutdown, it has a different context rather than if it was from a natural economic downturn,” Boockvar wrote. “We need to shift the focus now to how many businesses will reopen in coming months and quarters and how many of these lost jobs will come back. ” —Melloy

8:45 am: Historic jobs report

April’s jobless rate was worse than the post-war record of 10.8% and the high seen during the depths of the financial crisis at 10% in October 2009. Looking further back, it was short of the Great Depression high, estimated to be 24.9%. —Cox

8:40 am: US and China pledge to meet their trade deal obligations

Top trade negotiators for China and the U.S. agreed to work toward implementing the “phase one” trade deal the two countries signed in January. U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer held a phone call late Thursday with Chinese Vice Premier Liu He. Both sides “agreed that in spite of the current global health emergency, both countries fully expect to meet their obligations under the agreement in a timely manner,” according to the Office of the U.S.Trade Representative. The two sides also pledged to maintain communications. Tensions between the U.S. and China had flared again in the face of the coronavirus pandemic. –Li

8:35 am: Historic jobs report shows 20.5 million jobs lost in April

The Labor Department said on Friday 20.5 million jobs were lost in April, bringing the unemployment rate to 14.7%. Economists were forecasting a record 21.5 million jobs were lost in April, sending the unemployment rate higher to 16% from just 4.4%, according to Dow Jones. Stock futures jumped after the report. — Fitzgerald 

8:06 am: Wall Street headed for rally on Friday as ‘reopening’ stocks gain in premarket

Shares of companies that would benefit most if the U.S. economy reopened led premarket gains Friday morning. Airline stocks advanced with United, American, Delta and Southwest up 2.1%, 1.1%, 1.9% and 1.5%, respectively. Hotel operator Marriott added 1.8% while cruise line company Carnival Corp. rose a similar 1.9%. Simon Property Group, the largest shopping mall operator in the U.S., climbed 2.6% and Kohl’s rose 2.5%. U.S. stock futures were up roughly 1% in the premarket. — Franck

8:02 am: DA Davidson upgrades Uber to buy following earnings

Wall Street firm D.A. Davidson upgraded shares of Uber to buy from neutral following ride-hailing company’s quarterly earnings. “We believe UBER is well-positioned to leverage its multi-product platform (Rides, Eats, and increasingly Grocery) to emerge post-pandemic in a significantly stronger competitive position,” D.A. Davidson senior research analyst Tom White told clients. Uber reported first-quarter results Thursday, including revenue of $3.54 billion and a net loss of $2.9 billion, the company’s biggest loss in three quarters. Despite the large losses, White said Uber has better “cost discipline.” “UBER is also getting leaner, with recent cost actions/ market exits set to reduce annualized fixed costs by $1B and help ensure adj. EBITDA profits are delayed only slightly (to early 2021 in our view) despite COVID,” White added.  The firm also raised its price target on Uber to $39 per share from $23.50 per share. Shares of Uber jumped more than 7% in premarket trading on Friday.  —Fitzgerald

7:54 am: Jobs market could recover quickly after massive losses, history shows

Investors are bracing for a dismal U.S. jobs report Friday but Goldman Sachs economists point out the labor market’s rebound could be just as swift as its losses. “Over the last 50 years, the three recessions with the highest share of temporary layoffs were followed by the fastest labor market recoveries,” Goldman Sachs’ Jan Hatzius said in a note. Goldman expects U.S. nonfarm payrolls dropped by 24 million in April, slightly more than the consensus estimate of 21.5 million. —Imbert, Bloom

7:50 am: Big tech stocks edge higher

Shares of big technology stocks moved higher in premarket trading on Friday, building on recent strength the group has seen during the rebound from the coronavirus market rout. Shares of Microsoft ticked up 1% before the opening bell. Apple and Amazon rose 1.5% and 0.5%, respectively. Facebook also jumped 1% and Netflix shares rose about 0.4%. —Fitzgerald

7:27 am: Record losses expected in April jobs report

The U.S. economy is expected to have lost a record 21.5 million jobs last month, according to Dow Jones, as the coronavirus pandemic sparks massive layoffs and a near-complete halt of all economic activity. That would be a record loss for a single month. The unemployment rate is also forecast to have surged to 16% — which would be the highest since 1939 — from just 4.4%. “This is the biggest and most acute shock that we’ve seen in post-war history. It’s a dramatic loss of output in a very short period of time,” said Michelle Meyer, head of U.S. economics at Bank of America. The report is scheduled for release at 8:30 a.m. —Imbert, Domm

7:25 am: Stock futures rally ahead of April jobs report

U.S. stock futures rose sharply on Friday even as investors awaited what could be the ugliest monthly jobs report ever. Dow Jones Industrial Average futures were up more than 200 points, or about 1%. S&P 500 and Nasdaq 100 futures also gained 1% each. Wall Street was headed for its first weekly gain in three after sharp gains in the previous session put the Nasdaq Composite index in positive territory for 2020. —Imbert

—With reporting from Patti Domm, Yun Li and Michael Bloom. 

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