Good afternoon, it is August 10th 2020 and here is your economic and market update from BlackBee.
- Increase in US-China tensions sees tech shares sink.
- The pace of jobs added in US slows in July.
- Trump issues presidential orders to support the unemployed.
Tech shares sank on Friday as President Trump continued to target Chinese technology companies, increasing tensions between the US and China. Trump gave a deadline of 45 business days for US companies to stop dealing with WeChat, a messenger app owned by Tencent. Mr Trump has also recently taken aim at ByteDance, the owner of TikTok. The Nasdaq closed -0.87% lower. Despite a positive jobs report, the S&P500 and Dow Jones remained relatively unchanged closing 0.06% and 0.17% higher. The dollar halted a three-day losing streak as the dollar spot index climbed 0.7%. Gold’s 5-day climb came to an end as the price of gold fell -1.4% to $2,035.55. The Stoxx Europe closed 0.29% higher.
Figures released from the US labour department shows that the US added 1.8 million jobs in July. This brings the unemployment rate down to 10.2% for July from 11.1% in June. In April the unemployment rate stood at 14.7%. The pace of new jobs has significantly slowed from June where over 4.8 million were added. Although the jobs added shows that economic activity is picking back up, the rise in coronavirus cases has slowed economic recovery. A third of the jobs added were in the leisure and hospitality sector. The number of unemployed stands at 16.3 million for July.
For the last few weeks, Democrats and Republicans have been at odds over the extension of the pandemic unemployment payment with no deal yet agreed. The lack of a deal threatens the pace of economic recovery in the US. On Friday, talks broke down leaving unemployed Americans with no support yet in place, following the expiry of the pandemic unemployment payment in July. Over the weekend, to provide some relief to the unemployed Americans, President Trump signed four presidential orders. These orders include an unemployment payment of $400 a week down from $600 as Trump believes the $600 payment is a disincentive to work. They also include the suspension of the payroll tax for those on a salary under $100,000. Without the approval of Congress, there have been questions if President Trump has the authority to act on this issue.
Best & Worst Performers of Large Cap US Stocks on Friday
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Global Market Update
(as at close of markets 07/08/2020)