Stock markets on both sides of the Atlantic powered ahead yesterday, lifted by numbers showing the US economy is generating jobs by the millions again, completely wrong-footing pessimistic analysts.
European stocks were massively higher at the close. London did somewhat less well than its eurozone peers as the pound strengthened, undercutting earnings prospects for export-heavy FTSE index members.
Global stock markets had already been on the recovery path, as economies were being injected with unprecedented cash from governments and central banks, and lockdowns were being eased.
In London, the FTSE 100 closed up 2.3% to 6,484.30 points; Frankfurt — DAX 30 ended up 3.4% to 12,847.68 points; Paris — CAC 40 closed up 3.7% to 5,197.79 points and EURO STOXX 50 ended up 3.8% to 3,385.05 points yesterday.
The dollar and oil also got a shot in the arm from the jobs data that had been expected to be dismal, but ended up fuelling hopes the world economy may already be emerging from coronavirus gloom.
The US economy regained 2.5mn jobs in May as pandemic shutdowns began to ease, sending the unemployment rate down to 13.3%, the Labor Department reported yesterday.
This compares with consensus forecasts of an eight-million drop in the workforce.
“This a mind-blowing number and shows that the economy is improving,” said Naeem Aslam, chief market analyst at AvaTrade.
“Things are not as bad as many thought.
This data, if it is a true reflection of the economy, is likely to speed up the recovery for the US economy,” he said.
On Wall Street, the Dow had clocked up a staggering gain of more than 1,000 points by the late New York morning.
“US stocks continue to rock and roll after a better than expected non-farm payroll report suggests the economic recovery already began in May,” said Edward Moya at OANDA.
The latest support came from the European Central Bank, which on Thursday ramped up its emergency bond-buying scheme by a bigger-than-expected 600bn ($674bn) to 1.35tn.
The dollar rose against the euro following the jobs data, having earlier in the session traded at a three-month low against the European currency.
Oil prices were firmly on course for a sixth weekly rise partly on fresh hopes for the US economy, and partly because Opec and its allies brought forward a meeting to discuss further oil output cuts.
Opec’s 13 members led by Saudi Arabia and their allies, including Russia, who had originally been due to meet on June 9 and 10, will now meet today to talk about cuts, an Opec source said.
Visitors arrive at the Paris Stock Exchange (file). The CAC 40 index closed up 3.7% to 5,197.79 points yesterday.
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