Continuing Claims, reported a week in arrears, did manage to land a fresh post-pandemic low 3.236 million from the previous week’s upwardly revised 3.265 million. And we’re down roughly half a million longer-term jobless claims than we were 10-12 weeks ago, which demonstrates real progress on the labor market front, even if the initial claims headline is disappointing.

Keep in mind, several states around the country had pulled the plug on their unemployment assistance programs as the Great Reopening began to blossom. Perhaps there is still a bit of transitional equilibrium yet to be reached between those seeking work and job openings in particular industries, which would be explained by these policy changes.

We see the best success in employment growth in areas where wage hikes have notably increased. Once employers entice their potential workforce that they can earn more working than from receiving government assistance, even at the risk of slimmer margins if they cannot initially pass along added costs to consumers, their companies tend to prosper. Likely, today’s jobless claims numbers tell the story of a continuing transition toward full employment.

European Central Bank (ECB) President Christine Lagarde is speaking right now in Frankfurt, Germany for its Governing Council policy meeting. In a written statement before her address, the ECB has decided to keep interest rates unchanged or perhaps move them lower until the optimum 2% inflation growth is reached, very similar to U.S. Fed policy of the past year.

The ECB will also keep its Pandemic Emergency Purchase Programme (PEPP) in place until March of 2022 or the pandemic ends, whichever comes first. This amounts to a total of 1.85 trillion euros in asset purchases, about 20 billion euros per month. Currently, Europe is fighting a recent swell in Covid cases, largely due to the rapidly spreading Delta variant, much as we have seen in areas of the U.S. recently.

After the opening bell today, we expect to see new Existing Home Sales numbers for June. Analysts forecast an increase to around 5.9 million seasonally adjusted, annualized units sold last month, up from the 5.8 million reported for May. Also, the Index of Leading Economic Indicators for June comes out later today, expected to dip to +0.9% from the +1.3% reported the previous month.

Our modestly schizophrenic trading activity continues in today’s pre-market, either because the indexes lack direction, want to keep investors guessing, or some combination of the two. In any case, we’re not straying too far in wither direction at this hour: the Dow is -40 points, the Nasdaq is +10 and the S&P 500 is flat.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) gained 0.8% or 286.01 points to close at 34,798 points to turn positive for the week after Monday’s massive decline.

Shares of Exxon Mobil Corporation (XOM) gained 3.2%, while Chevron Corporation (CVX) jumped 3.4%. Chevron carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

The S&P 500 advanced 0.8% or 35.63 points to close at 4,358.69 points. The rally was led by energy and financial stocks.

The Energy Select Sector SPDR (XLE) jumped 3.5%, while the Financials Select Sector SPDR (XLF) gained 1.7%. Eight the 11 sectors of the benchmark index closed in positive territory.

The tech-heavy Nasdaq rose 0.9% or 133.08 points to finish at 14,631.95 points.

The fear-gauge CBOE Volatility Index (VIX) was down 9.22% to 17.91. A total of 9.13 billion shares were traded on Wednesday, lower than the last 20-session average of 10.17 billion. Advancers outnumbered decliners on the NYSE by a 2.92-to-1 ratio. On Nasdaq, a 3.21-to-1 ratio favored advancing issues.

Investors Show Faith in Economy

After Monday’s decline investors got back their confidence on Tuesday, while many continued to buy the dip. On Wednesday, the upbeat sentiment continued. On Wednesday, a string of big names reported robust earnings that further gave investors’ confidence a boost.

Shares of The Coca-Cola Company (KO) and Johnson & Johnson (JNJ) which reported impressive quarterly results saw their shares gaining 1.3% and 0.7%, respectively.

The 10-year Treasury yield is also playing key role in driving the markets. After hitting a five-month low on Monday, the 10-year Treasury yield stabilized on Tuesday that led to the rally. On Wednesday, the 10-year Treasury yield rose slightly by 8 basis points to 1.29%.

However, the trend is still down despite bonds moving higher. The 10-year Treasury yield is still a lot lower compared to five months ago when it had reached 1.7%.

On Wednesday, stocks that would benefit from the economic recovery went on a rally for the second day after suffering massive loss on Monday. Shares of Carnival Corporation & plc (CCL) soared 9.4%, while Las Vegas Sands Corp. (LVS) gained 3.4%.

No major economic data was released on Wednesday.