Daily market review

United States

Much better than expected US payrolls data and hopes for a Covid-19 vaccine boosted equities Friday but gains faded into the close on caution ahead of the long US holiday weekend and worrying Covid-19 news. The Dow Jones industrial index ended up 0.4 percent, the S&P 500 gained 0.5 percent, and the NASDAQ also rose 0.5 percent.

On the jobs report, the further easing of restrictions fed a 4.8 million rise in nonfarm payrolls in June, above Econoday's consensus for 3.0 million. The unemployment rate also did better than expectations, falling 2.2 percentage points to 11.1 percent.

News Wednesday that Pfizer (up 2.3 percent) and BioNTech (down 1.4 percent) were reporting positive results in their vaccine trials continued to resonate Thursday. On the negative side was a STAT report that a larger phase-3 vaccine trial by biotech Moderna (down 4.9 percent) would be delayed, most likely a few weeks. That followed word of rising Covid-19 cases in many US states, and renewed concern that the economic recovery may stall as consumers stay home.

Among sectors, leading the advancers were materials stocks, with strength in chemicals and industrial metals. Energy stocks rose with crude oil prices. Industrials outperformed, along with chipmakers. Beverages gave consumer staples a lift. Lagging were consumer discretionary, media, and real estate.

Among the day's winners, Avis, the car rental company, rose 15 percent on an upgrade at Morgan Stanley. Tesla gained 8 percent on stronger than expected car deliveries in the second quarter, including big demand from China. Akamai, the internet infrastructure provider, rose 6.4 percent on buoyant demand for cloud services. National Beverage gained 0.9 percent on an earnings and revenues beat amid rising home consumption during the pandemic.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 80 cents to US$42.81, while spot gold rose US$4.27 to US$1,776.35. The US dollar rose against most major currencies. The US Treasury 30-year bond yield was flat at 1.43 percent while the 10-year note yield was also unchanged at 0.67 percent.


Better-than-expected US jobs data and positive vaccine news gave equities a lift Thursday. The Europe-wide STOXX 600 rose 2.0 percent, the German DAX jumped 2.8 percent, the French CAC gained 2.5 percent, and the UK FTSE-100 was up 1.3 percent.

A positive surprise on US non-farm payrolls and favorable Covid-19 vaccine trial news Wednesday from BioNTech and Pfizer spurred gains across the board. UK stocks underperformed amid negative headlines from ongoing EU/UK Brexit talks.

Among sectors, biggest winners were banks, autos, chemicals, insurance, construction & materials, travel & leisure, financial services, basic resources, and personal & household goods. Lagging but still higher were media, health care, telecom, food & beverage, oil & gas, and real estate.

Among companies, Abivax, the French biotech, rose 7.8 percent after announcing favorable results for its Covid-19 treatment. UK aerospace company Meggitt rose 7 percent despite warning it sees business down sharply in the second quarter. The day's featured loser was Wirecard, off 43 percent after news the police raided the offices of the bankrupt German financial services firm. UK packaging company DS Smith was off 6.9 percent after cancelling its dividend despite booming demand for its boxes for home deliveries.

Asia Pacific

Major Asian markets closed higher Thursday, though gains were uneven with a light regional data calendar providing limited direction to investor sentiment. Covid-19 developments were again a major focus, including further increases in cases in parts of the United States, Japan, India, and Australia and reports Wednesday that a trial of a potential vaccine for Covid-19 had yielded positive results.

Hong Kong's Hang Seng index was the regional outperformer, closing up 2.9 percent after a holiday Wednesday, with strong gains for tech firm Tencent Holdings. Protests against tighter national security laws imposed by the Chinese government on Hong Kong continued Thursday with many arrested, including some for violations of the law. The Shanghai Composite index closed higher, up 2.1 percent, and is now back around levels seen before the outbreak of Covid-19 in late January. Shares of local banks gained after authorities announced that local governments will be allowed to issue additional bonds to refinance small and medium-sized banks. Australia's All Ordinaries index closed up 1.7 percent, while Japan's Nikkei and Topix indices advanced 0.1 percent and 0.3 percent respectively.

Australia's trade surplus widened from a revised A$7.83 billion in April to A$8.025 billion in May. Exports fell 4.3 percent on the month in May after a decline of 11.4 percent in April, while imports fell 6.1 percent on the month after dropping 6.9 percent previously.

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