Weekly Market Insight

Latest Economic & Market Update 8th June 2020

08th June 2020

Good afternoon, it is 8th June 2020 and here is your economic and market update from BlackBee. 

Today we focus on:

  • Stocks rise on jobs data.
  • Over 2.5 million US jobs added in May.
  • Ireland GDP for Q1 2020 grows by 1.2%.

Investor hopes of economies reopening and economic activity increasing have been a driving force in the rally in recent weeks. On Friday, US Stocks and Treasury yields rose on the back of unexpected payroll data despite the unemployment rate still remaining high. The rally has left the S&P500 just -0.8% YTD with the Dow Jones Industrial Average -4.7% YTD and Nasdaq +9.7% YTD. Opec have reached a deal to extend oil production cuts until the end of July leaving crude oil just below $40 a barrel.
In the US, over 2.5 million jobs were added in May driving the unemployment rate down from 14.70% in April to 13.3% in May. A wave of rehires eased concerns for investors about the damage caused by the crisis and gives hope that the economic recovery may be faster than expected. With the economy still reopening it is likely that the trend of rehires will continue. However the number of unemployment claims rose to over 40 million last week due to the crisis and full employment will not be reached again for some time.
Ireland’s GDP grew by 1.2% in Q1 2020. The drop in consumer spending was outweighed by growth in exports. Despite the lockdown only beginning during the middle of March, the crisis still had a big effect as transport and hotels contracted by 12.7% and consumer spending fell by 4.7%. Exports rose by 0.2% resulting in the value of net exports increasing by €1.878 billion. Monthly unemployment stood at 5.6% for May although this does not include claimants of the Pandemic Unemployment Payment and therefore does not provide a clear picture of unemployment as many receiving the payment may not have a job to return to. Results for Q2 2020 will provide a better understanding of the effect of Covid-19 as the lockdown has been in place for April and May with restrictions only starting to ease.

Best & Worst Performers of Large Cap Stocks on Friday
Click the image to enlarge

Global Market Update
(as at close of markets 05/06/2020)