Update 07-05-2020: Dow Jones shakes off jobs data once again to near 24000, FTSE at one-week peak
Thursday saw another horrendous piece of jobs data out of the US, and another triple-digit surge from the Dow Jones.
For the week ending May 1st, another 3.169 million Americans filed for unemployment, pushing the figure for the last month and a half towards 34 million. That figure follows yesterday’s -20.236 million ADP nonfarm reading, and ahead of tomorrow’s potentially -21.4 million headline nonfarm number, in a jobs report that could also see the unemployment rate shot up from 4.4% to 16%.
And yet, as has been the case for a while, investors weren’t all that bothered by these job losses. Instead, focusing on Donald Trump’s strategy to reopen America for business, deaths be damned, the Dow Jones added 300 points, once again putting a 24000-crossing close in the conversation.
This follows on from a solid day for Europe, one that saw the FTSE ignore its own dire data – in the form of the Bank of England’s economic forecasts – to rise 75 points, lifting the UK index to a one-week peak of 5930. The FTSE benefited from sterling’s downturn; the currency gave up its initial gains as the session went on, tumbling half a percent against the dollar and 0.4% against the euro, perhaps bearing the brunt of the Bank of England’s announcement. As for the Eurozone indices, a 0.8% increase for the DAX kept it above 10700, while the CAC sat at 4470 thanks to a 50 point rise.
Update 06-05-2020: History-making ADP nonfarm figure means little to Dow Jones and dollar
In a potential preview of how Friday will pan out, the US markets shook off a record-breaking ADP nonfarm employment change reading.
Though the figure was marginally better than forecast, such a fact means little when that still means 20.236 million jobs were lost across April. A truly staggering number – it’s the worst in the figure’s history – yet one that failed to garner much reaction investors.
That’s perhaps because it was long-trailed by week-after-week of shocking jobless claims. But, then again, those unemployment claims readings also failed to really shake the markets, at least not in the way their scale should demand.
It seems investors just aren’t that fussed about the job loss, as long as it seems that Donald Trump is hellbent on opening up the economy, even if it means more American deaths.
The Dow Jones rose around 70 points despite the data, keeping it around 23950. Its gains likely would have been larger if it weren’t such a strong day for the dollar, which added 0.8% against the pound and 0.5% against the euro.
This as the UK and Eurozone dealt with their own troubles, namely a worst ever monthly slump in German factory orders, and a far sharper than forecast decline in the UK construction PMI, which fell from 39.3 to 8.2. While both sterling and its single currency cousin were in the red, the reaction for the European indices carried. The DAX and CAC shed half a percent apiece, effectively the same amount the FTSE actually rose by as the session went on.
Update 05-05-2020: Dow Jones back above 24000 as market holds onto lockdown-focused rebound
Firmly focused on the various lockdown easing measures being implemented – or set to be implemented – around the globe, the markets kept up their rebound throughout Tuesday.
Adding 300 points the Dow Jones once again breached 24000 after the bell, as it tries to claw back the growth lost following Donald Trump’s China-attacks last week.
Those gains meant investors had to pick and choose which pieces of data they paid attention to. For while the ISM services PMIs was far higher than forecast – at 41.8 against the 37.5 expected – the USA’s trade deficit swelled by 12%, in large part thanks to the effective erasure of international travel and tourism.
Whether or not the Dow can keep up that level of growth is, much like yesterday, going to be dependent on Trump, namely if he feels like further stoking the fires of the tensions between the US and China. Though, to be fair, the markets seem to have ignored China’s UK ambassador Liu Xiaoming labelling such talk as a ‘political virus’ that will ‘poison’ relations. With the US perky, Europe felt more than comfortable to hold onto its own rebound. The FTSE spent the session lurking around 5850 thanks to a 90 point-plus rise, while the DAX and CAC were up 1.9% and 1.7% respectively.
Update 04-05-2020: Dow Jones sinks under 23500, but FTSE managed to eke out some growth
The Dow Jones joined the Eurozone indices in the red on Monday, while the FTSE continued to buck the wider trend.
Dropping close to 250 points, the Dow spent the early part of the US session lurking the wrong side of 23500. This as investors continued to fret about the way Donald Trump is trying to create an election campaign based on blaming China for the coronavirus, a strategy that could have dire consequences for relations between the two superpowers, and therefore the global economy.
How the US indices perform across the rest of the session will likely be dependent on whether Donald Trump or one of his cronies lobs any more verbal grenades towards China on the topic of tariffs or lab-grown virus conspiracies.
A more intense version of those losses were found in the Eurozone, where the DAX dove 360 points lower, the CAC fell more than 4%, and the Index shed 200 points.
In contrast, the FTSE had a rather easy time of it. The UK index actually managed to add a handful of points, benefiting from a basket of positive movements, including notable gains for BP, Shell, AstraZeneca, Glaxo and Ocado, alongside a half a percent decline from cable.