Inventory surge following unprecedented job losses: market recovery

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(Bloomberg) – Stocks rose for a second day, as investors took the risk despite the largest monthly job loss in at least 70 years. The dollar weakened and oil gained.

The stocks of energy, industrial and financial companies gave the S&P 500 the pace of its first weekly gain in three. The latest employment report showed a reduction of 20.5 million workers in April, propelling the unemployment rate to 14.7%. Although it was the highest since the Great Depression, investors anticipated the damage and speculated that it would mark a low point during the economic crisis fueled by the pandemic.

“The jobs report marks a sobering moment in our history, but it also likely marks the bottom of economic contraction with the hope of a better rest of the year,” said Bryce Doty, senior portfolio manager at Sit Fixed Income Advisors.

Meanwhile, oil has headed for its first consecutive weekly gain since February as production cuts by the largest producers and an emerging recovery in demand have started to rebalance a flooded crude market.

Stocks remain higher even after President Donald Trump has questioned the future of his “phase one” trade deal with China, saying on Friday that he was struggling with Beijing following the coronavirus pandemic .

Construction and travel stocks pulled the Euro Stoxx up while UK markets were closed for the holidays. Japanese stocks dominated Asia. Italian bonds climbed before a sovereign rating decision.

So far, stocks have managed to withstand miserable economic data and a string of poor earnings reports as investors bet on a rapid recovery, but the strong rebound in risky assets has prompted others wondering if further gains were warranted.

“Some feared that unemployment would approach 25%. Today’s data is therefore somewhat of a positive surprise, ”said Seema Shah, chief strategist at Principal Global Investors. “Today’s data has been weighing on negative sentiment for several weeks, so just lifting it raises a cloud.”

Elsewhere, gold has fluctuated. Bitcoin briefly surpassed $ 10,000 for the first time since late February.

Here are some of the main developments in the financial markets:

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