Company / Analytics

Week 23 in Brief

How did the major indexes perform?

The major US stock indexes rallied after a surprise surge in U.S. jobs raised hope that the economy is starting to recover from the coronavirus pandemic.

• The Nasdaq Composite became the first of the three major averages to climb back to an all-time high, advancing 2.0%, or 198.27 points, to 9,814.08 on Friday. After tumbling as much as 25% earlier this year, the tech-heavy index is now 9.3% higher for 2020.
• The Dow Jones Industrial Average jumped 829.16 points, or 3.1%, to 27,110.98. The Dow was only down 5.0% year to date after dropping as much as 34.6% in 2020.
• The S&P 500 rose 2.6%, or 81.58 points, to 3,193.93. Friday’s rally put the S&P 500 down just 1.1% for 2020. At one point this year, the broader market index was down 30.3%.
• The Dow was up 6.8% for the week, while the S&P 500 gained 4.9% and the Nasdaq Composite was up 3.4%.
• Zoom posted revenue of $328.2 million, up 169% year over year bating Wall Street consensus of around $202.5 million. For the July quarter, Zoom is now projecting revenue of $495 million to $500 million.12 hours ago
• Slack Technologies Inc.’s revenue topped $200 million in a quarter for the first time, but the stock still sank. Shares fell 14.2%, though they’re up 44.8% on the year.
• U.S. Employment data: US employers added more than 2.5 million jobs in May – the largest gain on record while the unemployment rate declined to 13.3%. The number of unemployment filings has been reducing and the May report is the latest indication of gradual recovery.

European markets provisionally closed higher on Friday driven by the latest U.S. jobs report.

• Britain’s FTSE 100 ended up over 2.3%, Germany’s DAX gained 3.4% and France’s CAC 40 jumped 3.6%, as most major bourses held in positive territory.
• The ECB on Thursday announced a 600 billion euro ($672 billion) expansion of its Pandemic Emergency Purchase Programme (PEPP), a larger increase than analysts had been expecting. This brings the ECB’S total bond-buying to 1.35 trillion euros.
• German factory orders fell 25.8% in May, according to figures released Friday morning, a more drastic contraction than analysts expected as Europe’s largest economy continued to be hammered by industrial shutdowns as a result of the pandemic.

Shares in the Asia Pacific were higher on Friday.

• In Japan, the Nikkei 225 rose 0.74% to close at 22,863.73 while the Topix index added 0.54% to end its trading day at 1,612.48. South Korea’s Kospi jumped 1.43% to close at 2,181.87 as shares of LG Chem surged 3.95%.
• Mainland Chinese stocks gained on the day. The Shanghai Composite rose 0.4% to about 2,930.80 while the Shenzhen component added 0.371% to approximately 11,180.60. Hong Kong’s Hang Seng index jumped 1.66%, as of its final hour of trading, with shares of HSBC jumping about 3.2%.
• Meanwhile, the S&P/ASX 200 in Australia closed 0.12% higher at 5,998.70.

Currencies

• The dollar was modestly higher on Friday but ended the week lower for a third consecutive week as uncertainty about the U.S. economy capped gains.
• The U.S. dollar index late Friday was up 0.18% to 96.93 but down 1.4% from last Friday’s close. On the day, the dollar was 0.38% stronger against the euro, at $1.129.
• Against the safe-haven Japanese yen, the dollar was up 0.44% to 109.61 yen.

Commodities

• Oil rose on Friday after an unexpected fall in the May U.S. employment data, and ahead of OPEC meeting on production cuts on Saturday.
• Brent crude futures were up $2.07, or 5.2%, at $42.07 a barrel, while West Texas Intermediate (WTI) crude futures gained $2.14, or 5.7%, to settle at $39.55 per barrel on Friday.
• Brent has risen 17% since Friday to reach a three-month high, in a range more comfortable for producers like Russia. The contract has more than doubled since crashing as low as $15.98 a barrel on April 22. WTI is up 11%.
• Gold dipped more than 2% on Friday as hopes for a global economic rebound got a boost, reducing demand for safe havens. Spot gold slid 1.9% to $1,678.81 per ounce. U.S. gold futures settled down 2.6% to $1,683. Bullion has declined about 2.6% so far this week, on track for its biggest fall since the week ending March 13.
• Silver slipped 2.3% to $17.32 per ounce and was set for its first weekly decline in five.

In the news

• Investors were also monitoring progress on Covid-19 vaccines as economies look to reopen. British drugmaker AstraZeneca has doubled its manufacturing capabilities for a potential vaccine to 2 billion doses with distribution expected to begin this fall. Meanwhile, Trump says the U.S. has 2 million coronavirus vaccine doses ‘ready to go’.
• A survey out of the U.K. on Friday showed consumer confidence in late May falling to its lowest level since the global financial crisis, while retail sales plummeted 18% across the month
• The stimulus package may not be enough to recover the economy. “It’s not going to work because of social distancing,” according to CNBC’s Jim Cramer, host of the “Mad Money”. On the other hand, the pandemic led to ‘one of the greatest wealth transfers in history’ and “we’re looking at a V-shaped recovery in the stock market, and that has almost nothing to do with a V-shaped recovery in the economy,” the “Mad Money” host said.

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