July 6, 2020
Optimism for a “V” shaped economic recovery and progress toward a COVID-19 vaccine overshadowed a recent spike in infections last week, leading all three major U.S. equity indices to solid gains in the holiday-shortened week. For the week, the Dow, S&P 500 and the NASDAQ gained 3.3%, 4% and 4.6%, respectively.
The economy dominated the news last week with better-than-expected pending home sales and a big jump in consumer confidence. But it was the June employment report, released last Friday, that caught the spotlight. While market analysts expected just over 3 million jobs to be created in June, the report showed an increase of 4.8 million jobs, dropping the unemployment rate down from 13.3% in May to 11.1% in June. This followed a surprise revision upward in the number of jobs created in May.
Development of a COVID-19 vaccine also helped dull the impact of the rise in infections after Pfizer and BioNTech announced positive results from their clinical trials.
Also adding to the positive backdrop in the global investment markets were Chinese stocks that saw the Shanghai Composite jump 5.7% today to its highest level since 2018.