Market Watch Weekly | May 8th, 2020 | Happy Mother's Day!
Erik Dekker - May 08, 2020
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It was a strong week for global equities with all major indices posting gains. The big headline of the week came on Friday with the release of official unemployment numbers in Canada and the United States.
It was a strong week for global equities with all major indices posting gains. The big headline of the week came on Friday with the release of official unemployment numbers in Canada and the United States. While the figures are staggering and our thoughts go out to the people and businesses impacted by this crisis, there is reason for optimism within the data.
We want to be delicate in our argument, but for one, the jobs data in and of itself is backward-looking. The April figures, which saw a record 20.5 million Americans and 1.9 million Canadians lose their job, are from the height of the crisis. Since then, economies have started to reopen. Although we still have a long way to go, the market is discounting what’s going to happen six months from now, when most of the economy will be getting back to work. Additionally, 78% of those who lost their job in April said they were furloughed, meaning the unemployment in theory will be temporary. This is an important distinction to make given that it suggests the recovery will be quicker. Strategists also point out that the losses have been somewhat concentrated in the leisure and hospitality sectors, overshadowing strength in other areas of the market.
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