European, U.S. stocks mostly fall after weak data

Agence France-Presse

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European, U.S. stocks mostly fall after weak data

AFP

'The market seems to be running out of steam. We're starting to see some of the real negative macro news,' says an analyst

NEW YORK, USA – European and Wall Street stocks mostly fell on Wednesday, May 6, following another round of poor economic data that sets the stage for what is expected to be a miserable official United States jobs report later this week. 

The grim tone worsened after the European Commission predicted the eurozone economy would contract by a staggering 7.7% in 2020, calling the downturn a “recession of historic proportions.”

Official data showed German manufacturers’ new orders plunged by a record 15.6% in March, while payrolls firm ADP said the US private sector lost a staggering 20.2 million jobs last month, setting a dark scene for the official employment report on Friday, May 8.

Markets have been cheered in recent days by gradual economic reopenings in several European countries and US states.

Germany‘s Chancellor Angela Merkel and state leaders on Wednesday gave the Bundesliga the green light to restart behind closed doors from mid-May, making it the first of Europe’s 5 major football leagues to return to the playing field

British Prime Minister Boris Johnson said he could begin to ease a nationwide coronavirus lockdown next week, while Belgium is to open shops on Monday, May 11.

But Spain’s parliament voted to extend the country’s state of emergency, allowing stringent coronavirus lockdown measures to remain in place for at least two more weeks.

Leading European bourses fell around 1%.

US stocks opened higher, but both the Dow and S&P 500 finished in the red following a choppy session.

“The market seems to be running out of steam,” said Peter Cardillo of Spartan Capital Securities. “We’re starting to see some of the real negative macro news.”

“As the macro indicators become more of a factor, that’s going to create a bit of hesitancy on the part of the investors,” Cardillo added.

Historic report ahead

Markets are girding for Friday’s US employment report, which is set to make history as the worst single-month job loss ever. The consensus forecast indicates the US lost 21 million jobs and unemployment ballooned from 4.4% to 16.2%, but some economists are forecasting a worse result.

Chris Beauchamp at online trading firm IG said investors already know the jobs numbers are going to be bad and are instead focusing on the questions of how long it will stay this way and what the recovery will look like.

“These are much tougher to answer, but the gains in equities over the past 6 weeks have been built on the idea that massive stimulus efforts will dull the edge of this crisis and promote a faster recovery,” he said in a note to clients.

Oil prices finished lower, ending a 5-day winning streak. US government data showed an increase in crude stockpiles, but not as big a jump as analysts expected. – Rappler.com

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