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Witness history again! There is a mystery behind the 4.8 million increase in non-farm payrolls in the United States in June. Us stocks gave up their gains in late trading.
Jul 3,2020 08:03CST
translation
Source:SMM
The content below was translated by Tencent automatically for reference.

SMM: the June non-farm payrolls report in the United States was released on Thursday. "the employment data is astonishingly good, and the US economy is making a strong comeback!" U.S. president Donald Trump boasted at a subsequent news conference. He also said that the next phase of the economic stimulus package is already under way, and next month's data is expected to be good.

Non-farm payrolls in the United States rose by 4.8 million in June, an all-time high, with an expected increase of 3.058 million and a previous increase of 2.509 million, according to data released by the Labor Department on Thursday. The unemployment rate was 11.1% in June, the second month in a row and is expected to be 12.5%, compared with a previous value of 13.3%.

However, some analysts said that the June non-farm report in the United States could not fully reflect the full picture of the job market, and the non-farm survey was conducted in mid-June, failing to take into account the suspension of restart brought about by the new crown pneumonia epidemic sweeping the United States again. With signs of a new round of shutdowns emerging, the market fears that the actual unemployment situation could be even worse.

Former Vice President Joe Biden said that the latest employment report data does not mean victory, the report does not reflect the surge in confirmed cases of new crown pneumonia, if there is no unified plan, the new crown pneumonia epidemic will continue to worsen.

According to epidemic data released by Johns Hopkins University in the United States, there have been a total of 2731939 confirmed cases of new crown pneumonia and a total of 128643 deaths in the United States as of 06:30 on July 3. Compared with 06:30 the previous day, there were 54771 new confirmed cases and 713 new deaths in the United States.

The three major indexes of US stocks rose collectively on Thursday, with the NASDAQ hitting an intraday record high. It is worth noting that there was a wave of diving in US stocks in late trading, with gains rapidly narrowing. As of Thursday's close, the Dow Jones Industrial average was up 93.48, or 0.36%, at 25828.45; the S & P 500 was up 14.19, or 0.46%, at 3130.05; and the Nasdaq composite index was up 53.00, or 0.52%, at 10207.63.

COMEX Gold showed a "V" trend on Thursday. As of the close, the COMEX gold futures August contract closed at $1790 an ounce, up 0.57 per cent.

International oil prices were strong on Thursday. By the end of the day, WTI crude oil futures closed at $40.65 a barrel, up 2.08 per cent, while Brent crude futures closed at $43.14 a barrel, up 2.64 per cent.

Us non-farm data for June far exceeded expectations

According to data released by the Labor Department on Thursday, non-farm payrolls in the United States increased by 4.8 million in June, a record high, with an expected increase of 3.058 million and a previous increase of 2.509 million. The unemployment rate in June fell for the second month in a row, with an expected rate of 12.5% and a previous value of 13.3%. The average hourly wage rose at an annual rate of 5 per cent and 5.3 per cent.

Employment in the leisure and hotel sectors rose sharply in June, as did retail trade, education, health services, manufacturing, professional and business services, according to the Labor Department.

In the United States, non-farm payrolls were revised from 2.509 million to 2.699 million in May; non-farm payrolls in private enterprises were revised from 3.094 million to 3.232 million in May; manufacturing payrolls were revised from 225000 to 250000 in May; the average hourly wage rate was revised from 6.7% to 6.6% in May; and the quarterly adjustment of non-farm payrolls in April was revised from-20.687 million to-20.787 million.

After the release of the non-farm report, the US stock futures index rose sharply, and S & P 500 index futures and Dow futures rose more than 1% at one point. International oil prices also jumped rapidly, while the dollar index and spot gold fluctuated in a narrow range.

Subsequently, US stocks opened, the three major indexes of US stocks collectively opened higher, and the NASDAQ composite index set a new record high in intraday trading. It is worth noting that there was a wave of diving in US stocks in late trading, with gains rapidly narrowing. As of Thursday's close, the Dow Jones Industrial average was up 93.48, or 0.36%, at 25828.45; the S & P 500 was up 14.19, or 0.46%, at 3130.05; and the Nasdaq composite index was up 53.00, or 0.52%, at 10207.63.

COMEX Gold showed a "V" trend on Thursday. As of the close, the COMEX gold futures August contract closed at $1790 an ounce, up 0.57 per cent.

As for the non-agricultural data, foreign media commented that the non-agricultural data reflected the resumption of activities in all 50 states in the United States, especially in the service sector, after the epidemic swept through most of the United States. The leisure and hotel industries are once again the fastest-growing industry, with an increase of 2.1 million people, or about 40 per cent of the total growth. However, because the government investigation was conducted in the middle of this month, it did not take into account the suspension of restart brought about by the epidemic sweeping the United States again.

Analysts at consultancy Medley Global Advisors said the US non-farm data were better than expected, but jobless claims rose more than expected last week, the rise in long-term Treasury yields may be limited, and employment data show that various "V" recoveries are continuing, but weekly joblessness rose faster than expected, suggesting that the improvement in the job market will slow in July.

Brad Bechtel, a strategist at Jefferies, said the strong US jobs report, which showed a sustained recovery throughout June, was slightly positive for risky assets and slightly bearish on the dollar, but it was clear that the epidemic was still spreading in the US and safe-haven demand would limit the dollar's decline.

The energy plate is strong.

International oil prices were strong on Thursday. By the end of the day, WTI crude oil futures closed at $40.65 a barrel, up 2.08 per cent, while Brent crude futures closed at $43.14 a barrel, up 2.64 per cent.

In terms of inner trading, the Nenghua sector is also mostly red during the daytime trading session on Thursday. As of yesterday afternoon's close, the main contract of INE crude oil closed up 2.33%, the main contracts of methanol and PVC futures rose more than 2%, and the main contracts of fuel oil, asphalt, LPG, rubber, No. 20 rubber and styrene were all up more than 1%.

According to foreign media reports, yesterday, Russian Energy Minister Novak said that under the current agreement, it will see a slowdown in oil production cuts from August.

In addition, market news said that OPEC and Russia may relax the previous record production reduction agreement from August. Sources said that OPEC and Russia have not yet discussed extending the production reduction agreement to August. This means that the scale of production reduction is likely to be reduced to 7.7 million barrels per day.

Standard Chartered Bank wrote in a recent report that while oil prices may stop rising around $40 a barrel, given the renewed surge in new confirmed cases in the United States, which could have a negative impact on demand, so the downward revision of oil prices is likely to be even greater. "We must be vigilant about the sustainability of the significant growth in gasoline demand, as the number of confirmed cases of new crown pneumonia in the top three gasoline consuming states in the United States has repeatedly reached a one-day high, which is inconsistent with the recent comments on the'V 'recovery in the market." Standard Chartered Bank said.

In a recent report, analysts at Goldman Sachs predicted that global oil demand would return to pre-epidemic levels by 2022, citing increased commuting, a shift to private transport and a recovery in infrastructure spending. In the long run, analysts say they now don't think oil demand will peak before 2030. According to the bank's refining demand (ROAD) model, its latest peak oil demand forecast is based on strong fundamental economic growth, emerging market demographics and other factors. They believe that non-OECD countries and the petrochemical industry will be key factors driving oil demand growth over the next decade.

"Thursday's rise in the domestic chemical sector is mainly driven by higher international oil prices, and it is also a concentrated reflection of the market's good expectations for the future. The rising trend of some varieties whose prices are at a low ebb is more obvious. " Yu Jiansen, a researcher at Zhaojin Futures, believes that in the medium to long term, the rise in oil prices is relatively certain, and oil prices are expected to show an oscillatory upward trend, but the recovery time may be longer.

In the short term, he said that the current overseas epidemic is not over, the effectiveness of stimulus policies in various countries is limited, and the pressure and uncertainty facing oil prices are still huge. Recently, international investment banks have begun to worry about the oil price again, and once the oil price rises too quickly, the marginal capacity of the previous shutdown will be released quickly, which will cause a second blow to the oil price.

The research team of Citic Futures Energy Group said that the latest EIA data show that the balance between supply and demand in the United States continues to advance. In July, as oil companies resume production, the decline in production may slow, and refinery operating rate will continue to rise, still down 20% from the same period last year. If refined oil inventory decreases and profits are repaired, it will help to pick up the operating rate in the later period. Oil prices have been fluctuating recently and continue to pay attention to the evolution of supply and demand and the progress of resumption of work. It is recommended that short-term light positions test short, long-term callback to buy.

Futures index leads the domestic futures market higher.

In the domestic futures market, most varieties closed higher on Thursday. Stock index futures led the gains, with IH2007 closing at 3071.6 points, up 3.32% at 4323.2 points, and 2.91% at 5954.2 points at IC2007, up 2.38%. The main contract between Shanghai and Shenzhen 300 futures and Shanghai 50 futures has risen for three consecutive days.

The spot stock index has also been bright in recent days, with the Shanghai Composite Index continuing to rise on Thursday to close at 3090.57 points, up 2.13%, after breaking through 3000 points on Wednesday. Data show that Shenwan non-bank financial sector led the rise of 5.52%, the banking sector also closed up 2.27%. A total of 50 stocks in the two sectors contributed 21.17 points and 10.43 points to the Shanghai Composite Index, respectively. Northbound funds bought and sold a total of 149.17 billion yuan throughout the day, a record high, of which 83.143 billion yuan was bought and 66.027 billion yuan sold, with a net purchase of 17.116 billion yuan.

Mao Lei, a researcher on Guotai Junan stock index futures, said that the domestic stock index has rebounded significantly recently, mainly affected by large-cap stocks that have a greater impact on the index, while the start of cyclical stocks such as banks and real estate has a lot to do with the better-than-expected improvement in recent economic data. For example, the official manufacturing PMI and Caixin PMI continue to be in the expansion range. The commercial housing transaction area of 30 large and medium-sized cities showed positive growth in June for the first time since November last year, coal consumption for power generation continued to increase for two months, and car sales also improved month-on-month in June. This series of data show that the market formed pessimistic expectations for the economy as a result of the epidemic, which now needs to be systematically revised. " Mao Lei said.

In his view, the stock market was extremely divided in the early stage, and sectors less affected by the epidemic, such as technology, growth, and essential consumer goods, continued to soar, and now, at a time when economic expectations are beginning to repair, funds must begin to pay attention to large-cycle varieties with low valuations and fundamental support, and when large-cycle varieties start, the upward trend of the index will be very "easy".

In the short term, Mao Lei believes that after the sharp rise in Prev, the current market bullish sentiment has been activated, and without the influence of extremely bearish factors, the strength of the expected index is expected to continue, and then need to pay attention to the latest developments in the economy and policy. That is, whether a series of economic data released in the later period can further increase investors' confidence in economic stabilization. From a policy point of view, we need to pay attention to whether there will be early withdrawal or tightening of stimulus policies in the case of increased economic resilience.

He further said that the overall strong performance of the stock market this year was closely related to the loose monetary policy environment of the world's central banks, and the liquidity premium provided great support for the upward trend of the stock index. "if the direction of loose policy is reversed, then the rebound height of the market will be limited. However, under the circumstances that the overseas epidemic has not completely subsided, it is expected that the policy will continue to be loose, which is also one of the backgrounds in which the market dares to actively do long. "

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