US Stock Market Overview – Stocks Rally Led by Cyclicals, ADP Private Payrolls SuprisePrivate payrolls fall less than expected
US stocks surged on Wednesday, with the Dow Jones Industrials leading the charge. Boeing shares rallied more than 12%, helping the Dow test the 200-day moving average. All sectors in the S&P 500 index were high, driven up by Cyclicals and Real-estate. Simon Properties was the best performing stock in the S&P 500 index. Energy shares continued to rally, following a larger than expected decline in oil inventories. US private payrolls fell less than expected, which helped stocks immediately jump higher on the open. The VIX volatility index continued to move lower, breaking down below the 26-level and testing the 200-day moving average.
Prive Payrolls Fell Less than Expected
US ADP private payrolls fell another 2.76 million in May according to a report from ADP. This compares to expectations that payrolls would decline by 8.75 million. Job losses were especially deep in large businesses, which reported a decline of more than 1.6 million. Manufacturing took one of the biggest hits as the sector lost 719,000 workers. May’s decline also marked a precipitous drop-off from the 19.6 million plunges in April, an estimate that was revised from the initially reported 20.2 million.
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Crude Oil Rallies Buoying Energy Shares
Crude oil rallied as crude oil inventories unexpectedly decreased by 2.1 million barrels from the previous week. Gasoline inventories increased by 2.8 million barrels last week and are about 10% above the five year average for this time of year. Distillate fuel inventories increased by 9.9 million barrels last week and are about 28% above the five year average for this time of year.
The demand is improving. Total products demand over the last four-week period averaged 16.1 million barrels a day, down by 19.4% from the same period last year. Over the past four weeks, gasoline demand averaged 7.2 million barrels a day, down by 22.5% from the same period last year. Distillate fuel demand averaged 3.4 million barrels a day more than the past four weeks, down by 13.4% from the same period last year. Jet fuel demand was down 68.7% compared with the same four-week period last year.