US Stock Market Overview – Stocks Rise Led by Financials; Utilities Buck the Trend

US Stocks moved higher on Wednesday led by strong gains in the Dow Industrials and the Russel 2000. Most sectors in the S&P 500 were higher, led by financials and Industrials, while Utilities bucked the trend. Weaker than expected US private payrolls, failed to weight on US yields, while the dollar continued to trend lower buoying the commodity complex. The US trade deficit narrowed, as both exports and imports rose more than expected. The VIX volatility index continued to trend lower, declining down to 23. While this level hits a new closing low since February, its still well above the 2019 average of 14.

US Private Payrolls Rise Less than Expected

US private payrolls increasing by just 167,000, according to a report released on Wednesday by ADP and Macro-Economic Advisors. This was below 1 million expected. Businesses with between 50 and 499 employees reported an outright decline of 25,000. Big business brought back 129,000 jobs while firms with fewer than 50 workers added just 63,000. All but 1,000 of the jobs came from the services sector, as professional and business services led with 58,000. Education and health services added 46,000 and trade, transportation and utilities contributed 41,000. On the goods-producing side, manufacturing added 10,000, but construction lost 8,000, and mining and natural resources fell by 1,000.

The Trade Deficit Narrowed

The US Commerce Department reported that the gap between the value of what the United States buys and what it sells abroad fell 7.5% to $50.7 billion in June from $54.8 billion in May. Exports shot up an unprecedented 9.4% to $158.3 billion. Imports rose 4.7% to $208.9 billion. This compared to June 2019, total U.S. trade when the combination of exports and imports plunged 21.9% to $367.2 billion.