Spreadex Market Update

Dow and FTSE fall following nonfarm shock and London emergency



The worst nonfarm jobs report since last spring didn’t spoil the first week of 2021 trading, but nevertheless took the wind out of the market’s sails.

Before December’s jobs data was revealed, the Dow Jones was gunning to open at a new record high. Instead it tumbled 0.2%, shrinking back below the 30,100 milestone it crossed on Thursday evening.

And to be fair to the Dow, that’s not too bad given the severity of the nonfarm numbers. Echoing Wednesday’s ADP disappointment, the headline reading showed that 140,000 jobs were lost in December, compared to the expected 60,000 addition. That’s the first negative number since April 2020, if a far cry from the 20.5 million jobs that were wiped out during that month.

Softening the blow somewhat was a revision to November’s reading, which rose from 245,000 to 336,000, alongside the 9th consecutive unemployment rate beat, at 6.7% against the 6.8% forecast.

The Dow’s damp start undermined the Eurozone indices; the DAX and CAC saw their gains cut to 0.3% and 0.2% respectively.

The declaration of a ‘major incident’ in London contributed to the unwinding of the FTSE’s momentum, if not the brunt of its explosive 2021 growth. A 0.2% decline left it hovering just above 6,860, compared to 6,490 at the start of the week.

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