Let’s run through the jobs report: 257,000 jobs created in January, above expectations of 237,000; upward revisions in November (423,000!) and December; wage growth up 0.5 percent; year-over-year growth of 2.2 percent.
Job growth and wage growth? We haven’t seen this in a long time.
Even before today’s open, we have been in the midst of a powerful rally, largely of a cyclical nature.
Cyclicals this week
- Energy: up 5.7%
- Materials: up 5.0%
- Consumer discretionary: up 4.4%
- Financials: up 4.0%
- Industrials: up 3.2%
Will we see more rate-related selling? There’s already some pressure on Treasurys. The iShares 20+ Treasury Bond ETF, after hitting new highs earlier in the week, is now down four days in a row.
Bulls have been arguing that equities should do well in general, as long as the economy is growing. Bears, obviously, have pointed out that equities have had problems in recent years when rates begin to rise, even a little.
By the way, while the U.S. markets seem to be back in focus, interest seems to be waning in mainland China, which hit a six-year high in January. It dropped 2 percent overnight, and is now down 4 percent for the week.
The Grammys are on Sunday. Not only is the awards show watched by tens of millions of people, but it can also sell a lot of music. Less well known is that it can also move some stocks. Our partners at Kensho noted that since 2000, several stocks outperformed in the five days after the Grammys:
Media stocks five days after the Grammys since 2000
- Comcast: up 2.9 percent (Disclosure: Comcast is the parent of CNBC and CNBC.com)
- Sony: up 1.9 percent
- IMAX: up 3.9 percent
- S&P: up 0.29 percent