Stock markets around the world rose on Thursday thanks to better-than-expected jobless numbers on both sides of the Atlantic.
Shares were buoyed by unemployment figures in the EU and US that both beat forecasts.
The Eurozone unemployment rate rose to 7.4% in May, data showed on Thursday morning. That was up from 7.3% the month prior but well below a forecast of 7.7%. Continental stock indices jumped higher when the data was published.
US jobs numbers, delivered early afternoon European time, also surprised to the upside. The headline unemployment rate fell to 11.1%, against a forecast of 12.3% in the market. 4.8 million new jobs were created last month, well above the 3.2 million predicted by economists.
“These numbers are the latest in a string of recent economic releases to show the US economy is bouncing back quicker than expected,” said Rupert Thompson, chief investment officer at wealth manager Kingswood.
Economists and analysts urged caution over the jobs numbers even as stocks rallied.
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said the eurozone data was “distorted beyond recognition” by furlough schemes and lockdowns, which meant many people couldn’t hunt for jobs.
Evangelos Assimakos, investment director at Rathbone Investment Management, said the US figures may be “somewhat deceiving” as they didn’t capture the recent surge in new COVID-19 cases that has sparked a fresh wave of shutdowns across the US.
“Ultimately, we find ourselves in a whipsaw market as the climate remains fragile and the world’s governments seek to balance protecting public health and helping their economies recover,” Assimakos said.
Earlier in the European trading session, sentiment had been buoyed by positive vaccine news from Pfizer (PFE) and Germany’s BioNTech (BNTX). The pair released “positive” early results from an ongoing trial of a vaccine candidate on Wednesday (1 July) afternoon.
“That report – which covers a vaccine still in its early, early days – seems to have countered the latest record high one-day case increase from the US, with 50,000 further COVID-19 infections announced on Wednesday,” said Connor Campbell, a financial analyst at SpreadEx.
Asian markets rallied in overnight. China’s Shanghai Composite (000001.SS) climbed more than 2% and the Shenzen Component (399001.SZ) rose 1.2%. The Hong Kong Hang Seng (^HSI) rose 2.1% as protestors took to the streets over the new security law imposed by Beijing. Japan’s Nikkei (^N225) rose just 0.1%.