Analytics, 04 July 2020
Week 27 in Brief
How did the major indexes perform?
US stocks ended the week higher after the June employment report showed the economy added more jobs than expected, reassuring investors that the recovery is continuing. The U.S. regained 4.8 million jobs last month, while the unemployment rate ticked down to 11.1% from 13.3% in May. U.S. markets were closed on Friday for the July Fourth holiday.
- The Dow Jones Industrial Average closed 92.39 points higher, or 0.4%, at 25,827.36. The S&P 500 also gained 0.5% to end the day at 3,130.01. The tech-heavy Nasdaq Composite hit a record high, climbing 0.5% to 10,207.63.
- The Dow rose 3.3% this week and the S&P 500 climbed 4% in the same period. It was the Dow and S&P 500′s biggest weekly gains since June 5. The Nasdaq posited its best weekly performance since May 8, jumping 4.6% this week.
- Wall Street started the session with sharp gains after the government reported that a record 4.8 million jobs were created in June. Economists were expecting 2.9 million jobs to be created. The unemployment rate fell to 11.1% from 13.3% in May, higher than economists’ expectations of 12.4%, according to Dow Jones.
- Boeing contributed to the gains, rising 0.6% after the airplane maker completed recertification flights for its grounded 737 Max jet. Boeing stock closed at $180.32 in the latest trading session. The Boeing stock has 19.56% over the past month, outpacing the Aerospace sector’s loss of 0.31% and the S&P 500’s gain of 1.89% at that time.
- Meanwhile, Facebook shares continued to fall as more advertising brands join a boycott movement against the social-media giant. Facebook closed at $233.42 in the latest trading session, marking a -1.74% move from the prior day. Facebook shares have gained 3.21% over the past month.
- The Federal Reserve is a lot more worried about the economy than the stock market or the president are. Officials and staff economists at the Fed caution that a second wave of recession could sweep over the country later this year if the coronavirus pandemic isn’t brought under control, according to a lengthy summary of the Fed’s policy meeting held on June 9-10.
European markets finished broadly lower on Friday with shares in London leading the region.
- The pan-European Stoxx 600 provisionally closed down around 0.9%, with basic resources falling 1.7% to lead losses while travel and leisure shares bucked the downward trend with a 0.1% rise.
- The FTSE 100 is down 1.33% while France’s CAC 40 is off 0.84% and Germany’s DAX is lower by 0.64%.
- German car sales plunged 40% in June to a 30-year low, according to German newspaper Tagesspiegel. Meanwhile, British factories are increasingly expecting to lay off workers, a survey from sector group Make the U.K. showed Friday, with 46% of manufacturers expecting to make redundancies within the next six months, rising from 25% in May.
Asian shares rallied to a four-month high on Friday on robust US payrolls data and a brisk pickup in Chinese service sector activity but a surge in coronavirus cases in the US kept a lid on further risk-taking.
- Mainland Chinese stocks were among the region’s biggest gainers on the day, with the Shanghai Composite surging 2.01% to around 3,152.81 while the Shenzhen Component added 1.335% to about 12,433.26. Hong Kong’s Hang Seng index was around 1.1% higher, as of its final hour of trading.
- In Japan, the Nikkei 225 added 0.72% to close at 22,306.48 while the Topix index ended its trading day 0.62% higher at 1,552.33. South Korea’s Kospi advanced 0.8% to close at 2,152.41.
- A private survey showed that China’s services sector grew at its fastest pace in over a decade in June, as the easing of coronavirus-related lockdown measures revised consumer demand.
Commodities
- Oil futures rose for a second session on Thursday to mark their highest finish since March, buoyed by better-than-expected U.S. job growth in June after data a day earlier showed the biggest weekly domestic crude supply decline since 2019,
- Global benchmark Brent oil for September picked up $1.11, or 2.6%, at $43.14 a barrel on ICE Futures Europe. The WTI was at $40.22 a barrel at the same time with a 1.06% decline.
- Meanwhile, gold surged to its lifetime high crossing $1,780 per ounce level, which indicates that prices of the yellow metal are going to remain strong despite decent equity returns.
Currencies
- The dollar was hemmed into a narrow range on Friday, supported by safe-haven flows as a resurgence of the coronavirus in the United States discouraged some investors from taking on excessive risk.
- Against the euro, the dollar was quoted at $1.2395 on Friday, held steady at 0.9469 against the Swiss franc, traded $1.2471 against the British pound, and little changed against the Yen at 107.50 yen.
The week Ahead?
Stocks in the week ahead will focus on the severity of the spread of the coronavirus, during what should be a lull between Thursday’s strong jobs report and the upcoming earnings season.