As the latest US services PMIs join those from China and Europe at the strong end of expectations, and May’s nonfarm employment change reading vastly undershoots some scary forecasts, the Dow Jones roared out of the gate on Wednesday.
Both the final Markit and ISM services PMIs came in higher than estimated, at 37.5 and 45.4 respectively – a long way off China’s 55.0 beat, but nevertheless more good news on a day that has only bolstered the market’s June optimism.
The real headline figure on Wednesday was the ADP (NASDAQ:ADP) nonfarm employment change reading. In a sign that we are truly in bizzaro-world, news that 2.76 million jobs were lost in May was reason to celebrate, so much better it was than the 9 million forecasts. The number for April was also revised lower, from 20.236 million to a still eye-watering 19.557 million.
Hoping that this will lead to a better than expected set of official nonfarm on Friday, the Dow Jones climbed more than 300 points after the bell, pushing it past 26050 for the first time since March 6th.
The muscular US open beefed up the already meaty gains seen in Europe. The FTSE doubled its growth, surging 150 points to hit 6375, a level the index last saw just shy of 3 months ago.
The Eurozone indices put their UK and US peers to shame. The CAC crossed 5000 with a 3.3% increase, while the DAX galloped 430 points higher, gunning past 12400 to strike a fresh 14-week peak.
Again, no thought given to the domestic situation in the US. Nor the still-increasing death tolls in the US and UK. Nor the as-yet-unresolved tensions between the US and China.
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