Jump to content

Equities surge, bonds tumble on surprise U.S. jobs gains

Recommended Posts

Equities surge, bonds tumble on surprise U.S. jobs gains

By David Randall



FILE PHOTO: The Wall Street sign is pictured at the New York Stock exchange (NYSE) in the Manhattan borough of New York City, New York, U.S., March 9, 2020. REUTERS/Carlo Allegri/File Photo


NEW YORK (Reuters) - An unexpected jump in U.S. employment sent world equities and oil surging on hopes that the global economy has started to recover from the coronavirus pandemic, pulling investors out of perceived safe havens like government bonds and gold.


U.S. nonfarm payrolls rose by 2.509 million jobs last month after a record plunge of 20.687 million in April. Economists polled by Reuters had forecast the unemployment rate jumping to 19.8% in May and payrolls falling by 8 million jobs.


"The numbers are a huge surprise to the upside," said Michael Arone, chief investment strategist at State Street Global Advisors. "It has confirmed what many folks were suggesting: that the effects on the labor market from the pandemic were temporary and that when the economy reopened and the infection rates started to diminish, that these jobs would come back."


MSCI's gauge of stocks across the globe <.MIWD00000PUS> gained 2.04%. The index is now down 4.5% for the year to date and trading at its highest level since early March, before the U.S. economy went into lockdown in an effort to slow the spread of the novel coronavirus.


On Wall Street, the Dow Jones Industrial Average <.DJI> rose 829.16 points, or 3.15%, to 27,110.98, the S&P 500 <.SPX> gained 81.58 points, or 2.62%, to 3,193.93 and the Nasdaq Composite <.IXIC> added 198.27 points, or 2.06%, to 9,814.08.


The broad S&P 500 is now down about 1% for the year to date.


Equity gains were widespread before the surprise jobs report. MSCI's broadest index of Asia-Pacific shares outside of Japan <.MIAPJ0000PUS> rose 0.9%, reversing early losses to stay near a 12-week high.


The index is up about 7.6% this week, on track for its best weekly showing since December 2011.


Emerging market stocks <.MSCIEF> were up 0.7% and also on course for their best week since December 2011.


Hopes for a swift economic recovery sank U.S. government bonds, which had reached historic highs on fears that the pandemic would erode consumer demand. Benchmark 10-year notes <US10YT=RR> last fell 20/32 in price to yield 0.8851%, from 0.82% late on Thursday.


"The sell-off in the bond market in the last few weeks seems to be justified," said Subadra Rajappa, head of U.S. rates strategy at Societe Generale. "This is a tremendously positive step in the right direction, and probably points to a faster recovery, at least in the jobs market, than people had expected."


Bond investors will get further insight into the likely direction of the economy when the U.S. Federal Reserve holds its regular two-day policy meeting next week.


Europe has now clawed back two-thirds of the losses incurred amid the coronavirus pandemic and Bank of America analysts said on Friday they expect European stocks to rise another 10% by the end of September on expectations of a pickup in business activity.


Set for a third straight week of gains, the euro rose to $1.1380 <EUR=>, its highest level since March 10 and was on course for a weekly jump of 2.5%.


The dollar index <=USD> made a tepid recovery, rising 0.08% to 96.84, but remained on track for its third consecutive week of losses and close to its lowest in nearly three months.


Hopes for an economic recovery sent oil prices surging. U.S. crude <CLc1> recently rose 4.97% to $39.27 per barrel and Brent <LCOc1> was at $42.14, up 5.38% on the day.


(Reporting by David Randall; Editing by Nick Zieminski, Richard Chang and Will Dunham)



-- © Copyright Reuters 2020-06-06



  • Like 2

Share this post

Link to post
Share on other sites
53 minutes ago, TopDeadSenter said:

Incredible achievement. Watching Bloomberg when the upside shock figures were released was hilarious. Jonathan Ferro's jaw dropped visibly. So let's see what the voters prefer in November. Trump and jobs, or the opposition and mobs.

What specific Tweet was it that 45 produced that was responsible for the BLS numbers?


Perhaps you can illuminate for all by posting what specific thing 45 did to result in the BLS number.

  • Like 2
  • Confused 1

Share this post

Link to post
Share on other sites
5 minutes ago, bkk6060 said:

All this will lead to a Trump victory in November.

It is all about the money, never forget that.

One swallow doesn't make a spring.


There are 5 more months before it's November

  • Like 1
  • Haha 1

Share this post

Link to post
Share on other sites

This probably the best summary of Friday’s equities rise. 

The whole market is not up,” said Giorgio Caputo, a portfolio manager at J O Hambro Capital Management, who said his firm has added to stockholdings in recent months. “It’s the best of times for some firms. It’s the worst of times for other firms.”

  • Haha 1

Share this post

Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • Create New...