Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Uncle Sam Wants You, Back At Work

Published 07/03/2020, 07:45 AM
Updated 03/05/2019, 07:15 AM

US Non-Farm Payrolls sparkle

Uncle Sam wants you back at work, it seems, with US Non-Farm Payrolls adding 4.8 million jobs overnight, yet again blowing the forecasts out of the water.

Initial Jobless Claims for the week held steady at 1.4 million, and Continuing Claims for the week stayed stubbornly at around 19 million. The Non-Farms report highlighted a bounce-back in hiring in the worst affected sectors from COVID-19, such as retail.

Although the data gave cause for cheer and relief, the financial market’s reactions across asset classes were somewhat underwhelming. Stock markets closed higher, but not markedly so. The US dollar hardly moved versus the majors. US Treasury yields rose initially but soon retreated. Oil rose modestly, and gold rallied after the data.

To some extent, the good news had been expected and had been partially priced in ahead of the data. The data itself, though, was collated before the massive increase in COVID-19 cases across the US Sunbelt States. That has undoubtedly tempered the exuberance in a shortened session overnight.

Although the US holiday today will thin trading volumes around the world, the day is not without intrigue. Australia and China have both posted impressive data this morning, confirming that the recovery in these two key economies remains on track. China’s Caixin Services PMI easily exceeded forecasts, climbing to 58.4.

Australia, meanwhile, posted a record climb in May Retail Sales of 16.90%, albeit of a low COVID-19 base. Both data points, though, emphasise that life is returning rapidly to their respective domestic economies. That should ensure that equities in Asia, continue their rally from yesterday and end the week on a positive note.

Singapore will post Retail Sales for May at 13:30. Another tepid number is expected after April’s 31.70% monthly fall. Offsetting that is the fact that Singapore was in the midst of its circuit breaker lockdown at that stage. The data will be too far backwards looking to impact Singapore markets, with the Island State’s domestic demand already recessionary, even before the pandemic struck.

Hong Kong Bill creating tension

Geopolitics remains a sticking point in the v-shaped recovery hopes of financial markets. Press reported that Hong Kong arrested 400 people under their freshly minted security law yesterday. The US Congress sent a bill to the President for signing, sanctioning Chinese officials associated with repression in Hong Kong and other parts of China.

Australia and Great Britain stuck to their guns over the legality of the new Hong Kong law and made noises about accepting millions of new citizens from the SAR. China did what it always does in this situation, got upset and threatened all the above with reprisals.

Doubts over whether China’s signature on a document is worth the paper it was printed on aside; I suspect that the intractable differences all both sides are weighing on markets. Ahead of the weekend and a US holiday, that is tempering the v-shaped recovery optimism.

From an Australian perspective, PM Morrison’s offer yesterday to provide a haven to Hong Kong citizens continues to confuse. Selling this to the electorate would be like selling ice blocks to Eskimos. Nor does the Australian PM have a distinguished record regarding immigrants, even from developing countries like New Zealand. Hong Kongers would be well advised to read the small print carefully. Christmas Island is nowhere near Sydney.

Original Post

Latest comments

That was the last good if you can call it that jobs report you’re going to see. That only went till June 11 those numbers. The exact time retail was hiring back some workers. We are still down 20 million unemployed. Again we’re gonna walk in on Monday and this upcoming week will be a massive correction in my opinion. It’s the black swan of all black swans coming. And it’s healthy for a market to correct for all you millennials. It’s not normal for the market to go straight up week after week month after Month day after day. That just makes the correction even deeper
Wrong you must watch CNN. If you haven’t learned by the CDC is helping the democrats and FAKENEWS when they changed how COVID cases to count to now allow probable cases without LABORATORY CONFIRMATION to found as confirmed cases. Read this from the CDC, {A COVID-19 case INCLUDES CONFIRMED and PROBABLY cases and deaths} {A probable case or death is defined as: A person meeting clinical criteria AND epidemiologic evidence with NO CONFIRMING LABORATORY TESTING PERFORMED FOR COVID-19; A person meeting presumptive laboratory evidence AND either clinical criteria OR epidemiologic evidence; A person meeting vital records criteria WITH NO CONFIRMATORY LABORATORY TESTING PERFORMED FOR COVID-19.} HERE IS THE CDC LINK https://www.cdc.gov/coronavirus/2019-ncov/covid-data/faq-surveillance.html
ask yourself this, Are you going to never have coitus again because your afraid of getting STD’s or HIV? Will you stay inside forever because your affraid of catching the flu, pneumonia, measles, mumps, E. Coli ect...? Will you never eat out again when there is a risk of catching hepatitis A? Will you stop driving because of the risk of getting into a car accident? Would you stop going outside because of the risk of skin cancer from the sun, or stop eating processed food because of the risk of cancer? Will you stay home forever because of a risk of getting shot? The world is a dangerous place and this has always has been the case and this ABNORMAL PANIC that’s being induced to cause extreme FEAR in ways that prevent you from living normally is all FAKENEWS; Never forget that you have gone your whole life without this fear and will continue to do so for the rest of your life. Or you can go become a real life BUBBLE MAN.
well said  you should be on staff for investing...Do not forget that All Lives Matter
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.