STOCKS SURGE AFTER THE JOBS REPORT: Here’s what you need to know (SPX, DJI, IXIC, WTI, USO, OIL, SHAK)

american human cannonball explode boom surge

Stocks had their best day of the week today after the April jobs report showed a drop in the unemployment rate and a rise in job gains from the previous month.

First, the scoreboard:

  • Dow: 18,199.43, +275.37, (1.54%)
  • S&P 500: 2,115.68, +27.68, (1.33%)
  • Nasdaq: 5,002.56, +57.01, (1.15%)

And now, the top stories on Friday:

  1. The US economy added 223,000 jobs (vs 228,000 expected) in April while the unemployment rate fell to 5.4%, the lowest since May 2008. Wages lagged though, with average hourly earnings rising 0.1% month-over-month (vs 0.2% expected) and 2.2% year-over-year (vs 2.3%.) And wages have been the missing piece of the recovery, keeping the Federal Reserve on hold from raising rates. “All things considered, any lingering possibility of a June rate hike from the Fed is now off the table, with September probably the most likely lift-off date now,” wrote Paul Ashworth, chief US economist at Capital Economics.
  2. The report also showed that workers are moving from being out of the workforce to being employed. After a record number of people moved from out of the workforce to getting a job in January, that trend has held up through 2015. The labor-force participation rate, which has been in decline over the past several years, ticked up in April.
  3. The US oil rig count tumbled for a 22nd straight week, and declined at a slower pace again. The latest data from oil services company Baker Hughes showed that the number of active oil rigs fell by 11 to 668, the lowest since September 10, 2010. The number of combined oil and gas rigs fell by 11 to 894, the lowest since June 12, 2009.
  4. Shake Shack shares staged a comeback, rallying by around 2% near the close after falling more than 12% on Thursday. There was no obvious news moving the stock lower Thursday, but in an afternoon email after the market close, Dave Lutz at JonesTrading said traders were discussing the unwinding of a popular hedge fund trade as being a catalyst for the move. The most recent hard news on Shake Shack was their first quarterly earnings report since going public, which had shares fluctuating in March.
  5. Shares of Bojangles spiked by up to 29% on the first day of trading. The fried-chicken-and-biscuit-chain priced its IPO at $19 a share, which was at the higher range of its expectations. A Bojangles’ regulatory filing showed that it had expected to sell 7.75 million shares at between $18 and $19 a share. The Charlotte, North Carolina-based chain is loved for its buttery biscuits made from scratch and its signature sweet tea, among others.
  6. Goldman wants clients to buy Alibaba shares. In a note Friday, Goldman upgraded Alibaba to “Buy” from “Neutral,” with a 12-month price target of $98. On Thursday, the Chinese e-commerce company reported earnings and sales above expectations, and its shares closed 7% higher. “4QFY15 earnings have increased our confidence on the growth outlook of the business, as well as its cost management,” the analysts wrote. In their upgrade, they noted the increase in gross merchandise volume (GMV), and the strong contribution to revenues from mobile. Separately, Wells Fargo says Alibaba will soon be bigger than Wal-Mart, the world’s largest retailer.
  7. McDonald’s same-store sales declined again in April. In April, global same-store sales, or sales at McDonald’s locations open for at least 13 months, declined by 0.6%, less than the 1.8% decline that was forecast by Wall Street. In the US, the decline was 2.3% in April, right in line with forecasts. And maybe the only thing McDonald’s can do to grow is to buy Wendy’s: “For example, if McDonald’s paid a 20 per cent premium and used two-fifths equity funding to buy Wendy’s it could boost earnings per share by four per cent by 2018 before synergies,” wrote Deutsche Bank in its weekender note Friday.

DON’T MISS: The disconnect in the US stock market just keeps getting bigger »

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STOCKS SURGE AFTER THE JOBS REPORT: Here’s what you need to know (SPX, DJI, IXIC, WTI, USO, OIL, SHAK)

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