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Equities surged this week on strong economic data, including an exceptional unemployment report that showed jobs increased in May. The Dow Jones Industrial Average gained 6.77 percent, the S&P 500 Index 4.90 percent and the Nasdaq 3.35 percent.

SPDR Energy (XLE) shot up 15.69 percent as investors priced in rising inflation. SPDR S&P Regional Banking (KRE) rallied 16.81 percent. SPDR Financial (XLF) jumped 12.18 percent this week as interest rates took off to the upside. SPDR Industrial (XLI) popped 10.50 percent.

The Bureau of Labor Statistics reported 2.5 million jobs were created in May, far better than the 7.5 million decline predicted by economists. As we noted last week, the Department of Labor’s weekly unemployment reports showed unemployment started falling during the week of May 9. The unemployment rate fell to 13.3 percent, below the forecasted 19.0 percent. Average hourly wages fell 1.0 percent as many of the jobs being added are lower wages positions.

The ISM manufacturing index climbed to 43.1 in May, up from 41.5 in April. The services PMI came back even stronger at 45.4 percent. Motor vehicle sales rebounded to an annualized pace of 12.2 million in May, beating expectations.

Crude oil climbed to $39 per barrel on Friday, approaching its 3-month high. iShares U.S. Oil & Gas Exploration & Production (IEO) jumped 9.04 percent on Friday alone. It gained 19.60 percent for the week. First Trust ISE Revere Natural Gas (FCG) added 23.62 percent.

The U.S. Dollar Index fell 1.45 percent this week, despite the European Central Bank ramping up its stimulus plans. iShares MSCI Emerging Markets (EEM) rose 8.43 percent and iShares MSCI EAFE (EFA) 7.04 percent. Resource exporting countries were among the best performers. iShares MSCI Brazil (EWZ) advanced 16.04 percent and iShares MSCI Australia (EWA) 12.51 percent.

Bond yields also rallied as inflation expectations picked up with the strong economic data. iShares 20+ Year Treasury (TLT) fell 4.38 percent on the week. Falling credit risk boost iShares iBoxx High Yield Corporate Bond (HYG) 2.83 percent and Invesco Senior Loan (BKLN) 1.92 percent. Corporate bond funds also were net winners as falling credit risk offset rising rate risk. Fidelity Corporate Bond (FCOR) climbed 1.15 percent. The 10-year Treasury yield climbed to 0.89 percent, the highest yield since mid-March.

Equities extended their recovery with the S&P 500 Index climbing past 3,000 this week. The Dow Jones Industrial Average rose 3.74 percent. The S&P 500 Index and Nasdaq gained 3.25 percent and 2.18 percent, respectively.

Utilities, financials and industrials were the top performing sectors. SPDR Utilities (XLU) advanced 6.86 percent, SPDR Financials (XLF) 6.36 percent and SPDR Industrials (XLI) 5.98 percent. Investors stuck with quality names this week. iShares Edge MSCI Minimum Volatility USA (USMV) outperformed most of the major indexes with a 3.67-percent gain. Vanguard Dividend Appreciation (VIG) also rose 3.67 percent.

Economic data showed the economy in much better shape than forecasted. Home prices increased 4.4 percent in March according to the Case-Shiller index. April new home sales blew away estimates of an annualized pace of 480,000, coming in at 623,000.

Consumer confidence increased in May according to both the Conference Board and University of Michigan Surveys. First quarter GDP was revised to negative 5.0 percent.

Stimulus checks boosted personal income by 10.5 percent. Along with the drop in consumer spending, the savings rate jumped to 33 percent as Americans repaired their personal balance sheets.

Initial claims for unemployment fell to 2.12 million this week, down approximately 300,000 from a week earlier. According to Department of Labor estimates, the unemployment rolls shrank by 3 million the prior week. If their estimates are in the ballpark, this means the overall unemployment rate is starting to decline.

Crude oil climbed above $35 a barrel this week. SPDR Energy (XLE) advanced 0.08 percent on the week.

The 10-year Treasury yield held at 0.65 percent this week. iShares Barclays 20+ Year Treasury (TLT) fell 0.66 percent as a result. Falling credit risk boosted high-yield and corporate bonds. iShares iBoxx High Yield Corporate Bond (HYG) increased 1.76 percent, Invesco Senior Loan (BKLN) 1.23 percent and Fidelity Corporate Bond (FCOR) 1.25 percent.

iShares China Large Cap (FXI) finished the week up 1.27 percent. iShares MSCI Emerging Markets (EEM) rose along with Chinese shares, closing the week with a gain 1.36 percent. iShares MSCI EAFE (EFA) advanced 4.38 percent on the week. The U.S. Dollar Index slipped 1.15 percent.