US jobs data boost stocks

Indices are in the black as traders buy back into equity markets on hopes for prolonged US financial stimulus measures.

Equity benchmarks including the FTSE 100 ended the week on a positive note on the ‘bad news is good news’ maxim. The US Labor Department had a surprise in store when it revealed that unemployment increased by 0.1% to 7.6% in May. Dealers were initially thrown off course by the higher-than-anticipated non-farm payrolls number, but quickly digested the unemployment number.

The US Federal Reserve has played a major part in the upward and downward movements of global markets in the past quarter, making it very clear that they will keep monetary policy loose until the US economy recovers, with an unemployment target rate of 6%. Investors bought equities after the announcements, not because of confidence in the US economy but because they believe the Fed will maintain its bond-buying scheme.

In London, the mining sector is performing well as traders pick up relatively cheap stocks, particularly natural resources shares which have been in decline with lower metal prices weighing on investor sentiment. China announces trade balance and inflation figures over the weekend; if the reports are positive we could see mining companies in demand at the start of next week as well.

In the US, the Dow is up 200 points at 15,240, with US equities continuing to outperform their European counterparts.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.