European shares end the day with gains. Changes for the week are mixed.

German Dax up 1.4%.

The European major indices are ending the day with gains.
The provisional closes are showing:
  • German DAX, +1.4%
  • France’s CAC, +1.1%
  • UK’s FTSE 100, +1.4%
  • Spain’s Ibex, +0.6%
  • Italy’s FTSE MIB, +1%
For the week, the major indices were mixed:
  • German DAX, +0.4%
  • France’s CAC -0.5%
  • UK’s FTSE 100, +0.6%
  • Spain’s Ibex, -2.1%
  • Italy’s FTSE MIB, -1.5%

White House’s Hassett and Kudlow doing the 1-2 spin job after jobs report.

Both White House advisor is speaking


  • does not think contraction has fully run course
  • US jobs report full of heartbreak, hardships
  • reopening phase will be intimate, spill into June
  • jobs numbers will continue to deteriorate
  • appropriate policies can make roaring economy in 2021
  • will see positive numbers and 2nd half of year
  • providing for virus safety should be fully deductible
  • having meetings with lawmakers of both parties
  • Trump weighing making business expenditures to make changes for coronavirus safety tax deductible
  • three quarters of today’s numbers are temporary layoffs
  • people expect to go back to work
  • unemployment numbers are heartbreaking
  • almost all unemployed expect to be re-hired by employer
  • next report could show 25% unemployment
  • payroll tax cut would only be a part of next package
Clearly there is a coordinated effort to use the word “heartbreaking” (and rightfully so).  They are also aware and touting that the numbers will get worse before they get better. The spin job is less rah-rah than the usual.
Stocks are not worried. They are trading at session highs as the two men finish their interviews.
S&P up 32.65 points at 2913
Nasdaq is up 81 points at 9060.62

Pres Trump: Does not believe China release the coronavirus on purpose

According to Fox news interview

Pres. Trump an interview with Fox news is out saying

  • he does not believe China release the coronavirus on purpose
  • he will decide soon on World Health Organization funding
  • he has not tested for coronavirus antibodies, but will probably do that soon
  • says he will provide Biden rapid testing if he needed it
  • jobs numbers are fully expected, no surprise
  • lost jobs will be back, economy artificially closed
  • he does know if Biden accusations are false or not
The tone on China has changed. Reports that China and US negotiators were getting together seems to have tilted the bias a little bit more toward a cooperative tone versus one that is accusing and blaming.  I am sure that will change and change again over time given the pattern and history.

US Nonfarm payroll for April tumbled -20500K vs -22000K

The US jobs report for April 2020

  • change nonfarm payroll -20500 vs -22000K. Prior month revised to minus 870K from -701K previously reported
  • 2 month payroll revisions-214K
  • private payrolls felt -19520K versus -22000K estimate
  • unemployment rate 14.7% vs 16.0% est
  • change manufacturing jobs -1330K vs -2500K est
  • average hourly earnings MoM 4.7% vs 0.4% est
  • average hourly earnings YoY 7.9% vs 3.3% estimate
  • average weekly hours 34.2 vs 33.5 hours
  • labor force participation rate 60.2% vs 61% estimate
  • Labor Department said large number of workers classified as employed, but absent. That likely The unemployment rate at 8 number better than estimated him

The numbers came out remarkably near the estimates (give or take 1.5 million).  The unemployment rate was better-than-expected however the Labor Department did say that large number of workers classified as employed, but absent. If those tilt to unemployed the unemployment rate would be higher.

The US labor department is out saying that the unemployment rate would be 5% higher if that workers were classified correctly. That would take the unemployment rate to near 20% (19.7%).
The initial reactions:
  • USDJPY moves higher. The EURUSD and GBPUSD moved lower.  AUDUSD move marginally higher but as rotated back lower
  • US stocks are higher. The Dow is up 319 points.  The NASDAQ index is up 110 points
  • US yields are higher with the 2 year up 2.1 basis points the 30 year is up 3.0 basis points

Former German finance minister says court ruling on ECB could threaten euro’s survival

Former German finance minister, Wolfgang Schaeuble, comments

  • It is very possible the existence of the euro is now put into question
  • Because every national constitutional court can decide for itself
  • The situation makes nobody happy
  • It is difficult if the German court cannot accept the ECJ decision
  • But it is also not easy to refute the German decision
The German constitutional court ruling earlier this week is sort of like the first shot being fired in this declaration of war. If the narrative starts to grow from here, it could mean serious issues and complications being posed to the whole idea of the euro itself.
The whole of Europe is certainly getting very frustrated right now as the coronavirus crisis has certainly stretched relations within the bloc to very fine margins at the moment.
This is going to be a key risk factor to consider for the single currency in the bigger picture as we continue to navigate through these testing times.

WHO: COVID-19 is a type of coronavirus that starts in bats

The WHO is giving a briefing on the animal origins of the virus

  • The coronavirus origin is linked to food, that is not unique
  • The Wuhan market played a role in spreading of the virus

The headline remark will surely infuriate US officials even more.

For what it’s worth, Der Spiegel is also reporting that Germany has doubts about the US’ claim that the virus came from a Chinese lab.
The report didn’t cite a source but says that the German Federal Intelligence Service was in touch with its partners from the US, UK, Canada, Australia, and New Zealand and none of them were able to confirm the claims made by US secretary of state Pompeo.
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