US stocks jump as employment dives

Markets rose on Friday.

The S&P 500 jumped 1.7 percent, the STOXX Europe 600 rose 0.9 percent and the Nikkei 225 surged 2.6 percent.

Investors shrugged off a report on Friday showing that the US economy lost 20.5 million jobs in April and the unemployment rate shot up to 14.7 percent.

“While this pandemic has the potential to create economic conditions that are as bad or worse than the Great Depression, the steps that the Federal Reserve Bank has already taken, coupled with the stimulus that Washington is also providing, are the main reasons why we are unlikely to re-experience that terrible time in world history”, said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.

Indeed, the US economy may already be recovering some jobs. Data from scheduling software company Homebase showed that while employment on 5 May was down 51 percent from before the COVID-19 shutdown, this is actually better than the 74 percent decline registered on 12 April, the worst day.

However, Sat Duhra, portfolio manager of Asia dividend income strategy at Janus Henderson Investors, told CNBC not to expect a V-shaped recovery in the economy.

“We’ve seen a bit of a V-shaped recovery in markets but that’s not how the real economy will behave,” he said.