Wall Street wasn’t all that convinced by the big numbers in the US jobs report for June – a record rise of 4.8 million and a big fall in the unemployment rate saw the Dow and S&P make solid gains at the start – 1.2% or more.
But by the close, most of those gains were gone as the continuing rise in COVID-19 cases overwhelmed investors.
It was one of those sessions where the weak tone at the close of the day (and before the Independence Day three day weekend holiday start on Friday) was very different from the bullish way the session opened.
In fact, much of the slide happened in the last 15 minutes of the session as investors prepared for the three-day break and decided not to remain long in the face of rising COVID-19 numbers and the prospect of more from gatherings over the break.
Florida announced an all-time high daily number of new cases of over 10,000 and the staunchly Republican and Trump-supporting Texas announced the mandatory use of face masks as infection rates in the state continue at or near-daily records.
The Dow ended up 92.39 points, or 0.36%, to 25,827.36, the S&P 500 added 14.15 points, or 0.45%, to 3,130.01 and the Nasdaq Composite added 53.00 points, or 0.52%, to 10,207.63.
The European STOXX 600 index rose 1.97% and MSCI’s gauge of stocks across the globe rose 1.34%. Emerging market stocks rose by 2.33%.
The overnight trading on the ASX futures platform had the index up 36 points at 7am, meaning a moderately solid start to the session on Friday.
But given the way Wall Street sagged, especially in late trading, you’d have to ask if the ASX can retain the early gains.
June’s jobs report, which saw the unemployment rate fall (to 11.1% from 13.3%) and average wages drop 1.2%, was taken just as the spike in COVID-19 cases started to accelerate. Over 31 million Americans were still collecting unemployment checks weekly.
After the 2.5 million new jobs in May and the 4.8 million last month, employment remains 14.7 million jobs below pre-pandemic levels. Another 1.43 million people filed for state unemployment benefits this week, down from 1.48 million last week. More than 800,000 others filed for federal benefits.
The US lost more than 22 million jobs during the height of the pandemic and has only restored 7.5 million of them in the past two months.
The Congressional Budget Office on Thursday cut its short-term assessment of the American economy’s growth as it struggles in response to the shock of the coronavirus pandemic.
“The economic growth in the second half of 2020 is now projected to be slower,” Congress’ non-political budget group said in updated economic projections.
In May, the CBO projected real gross domestic product to expand at 21.5% and 10.4% annual rates in the third and fourth quarters of the year. Now it estimates an average GDP growth rate at 12.4% for both quarters. The unemployment rate, previously projected to peak at 15.8% in the third quarter, is now estimated to top out at 14%.
In commodity markets, oil futures prices rose, supported by the US employment numbers and Wednesday’s drawdown in oil stocks, but the spike in US coronavirus infections fanned concerns that economic activity will weaken in the coming weeks.
West Texas Intermediate August futures rose 83 cents, or 2.1%, to settle at $US40.65 a barrel in New York. That was the highest finish for a front-month contract since March 6 and a gain for the four day trading week of 5%.
In Europe Brent September futures rose $US1.11, or 2.6%, to settle at $US43.14 a barrel. Brent oil traded 5.2% higher week to date.There’s a short trading session tonight, our time.
Comex August gold jumped $US10.10, or 0.6%, to settle at $1,790 an ounce, following the retreat from $US1,800 earlier in the week. For the holiday-shorted week, prices based on the most-active contract finished around 0.5% higher than last Friday’s settlement. Gold eased further in after hours trading.
Comex September silver rose 10 cents, or 0.6%, to settle at $US18.322 an ounce after falling 2.3% on Wednesday. For the holiday-shortened week, silver-finished about 1.6% higher. September copper settled at $2.7485 a pound, up 0.5% for the session, and up around 3% for the week.
Iron ore prices rose slightly – the price of 62% Fe fines delivered to northern China closed 30 cents higher at $US9947 a tonne, according to the Metal Bulletin.
