Wall Street Higher Despite Terrible Jobs Report, Oil Rises, Gold Softens

U.S. stocks are rising despite the worst monthly job loss on record. The U.S. economy shed 20.5 million jobs in April, slightly better than the consensus estimate of 22 million job losses. The unemployment rate hit 14.7%, the highest since just after the Great Depression, but could have been five percentage points higher if workers were classified correctly. 

The job losses were widespread with leisure and hospitality payrolls shedding 7.65 million jobs. Without a vaccine, it is hard to imagine that large parts of the economy (leisure, hospitality and retail) will recover the majority of jobs any time soon. The surge in wages is getting no attention as the widespread job losses were mainly hurting the lower paying ones. 

Wall Street did not learn anything new regarding the U.S. labor situation, but one thing seems certain, price action is signalling that the majority of these job losses are expected to be short-lived. Today’s stock market rally is mostly attributed to U.S.-China trade negotiators pledging support for the phase-one trade deal, this was the first communication between top officials since the deal was ratified in January. 


The surged against the Japanese yen after the better than expected NFP report. Safe-haven currencies softened across the board along with Treasuries.    


are higher as more countries signal further curtailing of crude production and after the worst downturn for the American labor market came in slightly better than what was feared. The NFP employment report pointed out that optimism is high for roughly 18 million job losses to be temporary, a potential sign that crude demand will pick up strongly in the U.S. once they come out of the other side of the coronavirus.   

Oil prices seem to finally be settling on a range after a constructive two weeks of steady gains. Energy markets are becoming confident the market will return to balance this summer and that we won’t have a repeat of last month’s contract expiry volatility. 


Gold’s fortunes revive only to be dashed by better than expected job losses in America. lost a little mojo after U.S.-China trade negotiators calmed markets by standing by their phase-one trade deal and after America’s historic job loss came in better than expected. Gold continues to hover between $1700 and $1750 as investors await to see if economic damage from COVID-19 will warrant much more stimulus in Europe and the Americas. 

Gold’s outlook is still for higher prices as the world’s largest economy will continue to struggle over the summer, signalling that much more aggressive stimulus should be coming. 

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