Skip Header

On 4 June 2020 - US, Europe flat to lower as rally pauses; Asia mixed

Anne D Picker

Anne D Picker - Econoday

Market eyes US jobs report, cautious after big gains

US markets

Equities were flat to down Thursday on caution before Friday’s employment report and profit-taking after a four-day rally that capped the S&P’s extraordinary 40 percent recovery from this year's lows. The Dow Jones industrial index was up 0.1 percent; the S&P 500 declined 0.3 percent, and the NASDAQ down 0.7 percent.

Among sectors, worst performers were the FAANGs, oil majors, biotech, real estate, utilities, and software. Outperforming were autos, travel & leisure, big banks, and industrial metals.

Among companies in focus, American Airlines surged 41 percent after saying its business is picking up and it plans to fly half of its usual domestic routes in July, up from 20 percent in May. Costco, the big box discounter, rose 1.3 percent after reporting a big jump in same-store sales in May, led by online sales. eBay, the e-commerce company, rose 6.3 percent after raising its earnings and revenues guidance. On the downside, J.M. Smucker, the jam-maker, fell 4.8 percent despite earnings and revenues beats as it reduced its annual guidance. The day’s featured loser was Smartsheet, the software company, off 23 percent after its guidance disappointed analysts.

In US economic data, initial jobless claims remain enormously high though they do continue to slow, to 1.877 million in the May 30 week. Since mid-March when virus effects first hit the labor market, nearly 43 million Americans have filed initial claims.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 20 cents to US$39.76, while spot gold rose US$18.59 to US$1,716.61. The US dollar weakened against most major currencies. The US Treasury 30-year bond yield rose 8 basis points to 1.62 percent while the 10-year note yield rose 7 basis points to 0.81 percent.

European markets

Profit-taking after the market’s recent strong gains pushed major equities indexes slightly lower Thursday. The Europe-wide STOXX 600 eased 0.7 percent, the German DAX declined 0.5 percent, the French CAC declined 0.2 percent, and the UK FTSE-100 was off 0.6 percent.

Among the day’s weakest sectors were autos, health care, utilities, travel & leisure, basic resources, and retail. Winners included real estate, banks, telecom, industrials, chemicals, and food & beverages. Banks were notable gainers after the European Central Bank expanded its asset purchase program more aggressively than markets expected, while automakers came under pressure after Germany's fiscal stimulus program omitted expected sales incentives for new car sales.

Among German automakers, Daimler was off 2.6 percent, and VW off 1.6 percent. Among banks, Deutsche Bank was up 2.5 percent and Banco Santander rose 1.7 percent.

In economic data, Eurozone retail sales saw a record 11.7 percent monthly drop in April, but the decline was much less than expected. Annual contraction fell to 19.6 percent in April, also a new all-time low.

Asia Pacific markets

Major Asian markets were generally little changed Thursday, with incoming data generally in line with expectations and few major developments on issues that have guided regional investor sentiment in recent sessions. Japan’s Nikkei and Topix indices advanced 0.4 percent and 0.3 percent respectively, Hong Kong’s Hang Seng index closed up 0.2 percent, and the Shanghai Composite index fell 0.1 percent.

Australia’s All Ordinaries index outperformed with an increase of 0.8 percent despite the release of weak domestic data Thursday, with investors appearing to share the confidence of officials that economic activity is likely to recover in the second half of the year. Retail sales fell a record 17.7 percent on the month in April after rising a record 8.5 percent in March, moves that reflected household stockpiling in the early stages of the crisis followed by restrictions on businesses.

Other data showed Australia's trade surplus narrowed from A$10.446 billion in March, a record high, to A$8.800 billion in April as the impact of the pandemic on regional trading flows continued. Exports fell 11.3 percent on the month after increasing 13.9 percent previously while imports fell 9.8 percent after dropping 3.4 percent previously, with weakness broad-based across categories.

Looking forward

On Friday in Asia/Pacific, Japanese household spending is due. In Europe, German manufacturers’ orders, UK Halifax HPI, and Italian retail sales reports are scheduled. In North America, Canadian labor force survey, Canadian Ivey purchasing managers index, US employment situation, and US consumer credit reports are due.

Global stock markets

 

Index

4 Jun 2020

Daily Change

% Change Daily

North America

United States

Dow

26281.82

11.93

0.1

 

NASDAQ

9615.81

-67.10

-0.7

 

S&P 500

3112.35

-10.52

-0.3

Canada

S&P/TSX Comp

15527.87

-47.24

-0.3

Europe

UK

FTSE 100

6341.44

-40.97

-0.6

France

CAC

5011.98

-10.40

-0.2

Germany

XETRA DAX

12430.56

-56.80

-0.5

Italy

MIB

19634.03

-7.78

0.0

Spain

Ibex 35

7566.8

-59.60

-0.8

Sweden

OMX Stockholm 30

1700.48

-9.48

-0.6

Switzerland

SMI

10075.68

-108.09

-1.1

Asia/Pacific

Australia

All Ordinaries

6112.02

47.09

0.8

Japan

Nikkei 225

22695.74

81.98

0.4

 

Topix

1603.82

4.74

0.3

Hong Kong

Hang Seng

24366.3

40.68

0.2

S. Korea

Kospi

2151.18

4.18

0.2

Singapore

STI

2707.2

6.81

0.3

China

Shanghai Comp

2919.25

-4.12

-0.1

Taiwan

TAIEX

11393.23

73.07

0.7

India

Sensex 30

33980.7

-128.84

-0.4

Note: all releases are listed in local time.

Important Information

Econoday Inc. is a US company that provides financial commentary and indicators to industry professionals. All information provided and views expressed are those of Econoday. Reference in this document to specific securities should not be construed as a recommendation to buy or sell these securities, but is included for the purposes of illustration only. Past performance is not a reliable indicator of future results. The value of investments can go down as well as up and investors may not get back the amount invested.