Wall St Shrugs Off Dire Unemployment Data

By Glenn Dyer | More Articles by Glenn Dyer

The ASX will struggle this morning after a tiny 3 point rise in the overnight futures market in the wake of a solid days trading on Wall Street.

Wall Street ended Friday’s session sharply higher despite Labor Department data showing 20.5 million jobs were lost in April, with the unemployment rate rising to 14.7%.

While that underscored the depth of the impact of the COVID-19 pandemic on the American economy, markets seemed to be glad they were not worse.

But the Labor Department did say the figures were not accurate because some unemployed were mislabeled by its data collectors.

The Labour Department said its survey-takers erroneously classified millions of Americans as employed in April even though their employers had closed down. If they had been counted correctly, the unemployment rate would have been nearly 20%, the government said in the jobs release.

The Dow rose 455.43 points, or 1.9%, to close at 24,331.32 and the S&P 500 index added 48.61 points, or 1.7% to end the week at 2,929.80. The was up 141.66 points, or 1.6%, to 9,121.32.

For the week, the Dow added 2.6%, the S&P 500 ended 3.5% higher, while the Nasdaq jumped 6% and moved into the green for the year to date.

Eurozone shares rose 1.1% on Friday and the US S&P 500’s gain came as investors ignored the horrible US jobs report for April which seems to have been anticipated and was not quite as bad as had been feared (but they were for the reasons described above due to the miscounting).

For the week US shares rose 3.5%, Eurozone shares rose 0.1%, Japanese shares gained 2.9%, Chinese shares rose 1.3% and Australian shares rose 2.8%.

Australian shares were helped by the positive global lead and the Government’s move to reopen the economy which saw all sectors gain but with very strong gains for IT, retail, materials, real estate, and energy shares.

Bond yields rose, as did oil, metal prices and iron prices. The Australian dollar also rose to end at 65.32 despite a rise in the US dollar.

ASX 200 futures only rose 3 points or 0.1% on Friday night pointing to that flat start to trade today.

The ASX200 posted gains of 0.5% on Friday as stocks were buoyed by news that Australia has a plan to emerge from coronavirus shutdowns.

The index finished the day up 26.9 points at 5,391.1.

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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