Wall Street Roars Back on Job Data
- After showing steady gains throughout last week, markets peaked on Friday, following a surprise growth in new jobs in the US.
- Analysts expected the report to show a decline of 8 million jobs, and instead, it showed growth of 2.5 million — the largest on record. Unemployment, which was expected to reach 20%, fell to 13.3%.
- As a result, the DJ30, SPX500 and NSDQ100 all showed impressive gains to end last week.
- The NSDQ100 was the first major index to reach a new all-time high since the coronavirus drawdown.
- Last week’s rally could have several possible explanations. One is that central banks around the world have shown they will do whatever it takes to keep markets afloat. Another may be the fact that, at the moment, there’s no major second wave of coronavirus. Lastly, despite the recent volatility, stocks are still considered by many a better option than government bonds.
Oil Jumps on Production Cut Hopes
- Oil reached a 3-month high last week and continued to climb on Friday, with some contracts adding as much as 5%.
- Members of OPEC+ met on Saturday, agreeing to extend the global production slowdown through July.
- China’s oil demand has recovered to more than 90% of pre-coronavirus levels.
Europe Offers More Stimulus
- Christine Lagarde, President of the ECB exceeded expectations last week, announcing that the Pandemic Emergency Purchase Program (PEPP) will go as high as 600 billion euro.
- Lagarde also said the PEPP may increase by an additional 500 billion euro in September.
- Germany introduced another rescue package of 130 billion euro, including a VAT reduction of 3%, and tax benefits of 6 billion euro.
Airlines Show Massive Gains
- As markets begin to reopen, several airlines showed massive gains throughout last week, including American Airlines, United Continental, EasyJet and British-Airways-Parent IAG.
- Shares of Delta Airlines, Boeing and Easyjet dropped by close to 70% during the coronavirus crisis, while Norwegian plummeted by more than 90%.
- However many airlines are now showing technical signs of bottoming.
Bitcoin Still not Climbing Above $10K
- Bitcoin briefly rose above $10K last Tuesday, but did not stay above the mark very long.
- The move looks to have been caused by a “pump and dump,” which has again brought the topic of market manipulation to the forefront of conversation within the community.
The Week Ahead
- Christine Lagarde testifies before the EU Parliament (Today).
- Fed rate decision and press conference (Wednesday).
Written by a team of experienced financial analysts at eToro.
This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation. Past performance is not an indication of future results.