US stocks opened sharply higher last week despite a stalemate in talks on the new government stimulus package intended to support workers amid the coronavirus-induced economic recession. Markets were encouraged by an upbeat manufacturing report, which took the manufacturing PMI to 54.2 in July. Later in the week, the NFP report showed that the US economy added 1.76 million jobs last month, along with a decline in the unemployment rate to 10.2%.
Sentiment was also supported by better-than-expected manufacturing reports from Europe and China, seen as solid signs of a recovery in the global economy. Investors chose to overlook the continued rise in covid-19 cases in the US and other parts of the world, with total global cases closing in to the 20 million mark.
Increasing tensions between the US and China remained in focus, as the Trump administration targeted Chinese tech companies, effectively banning TikTok and WeChat.
Performance of US Indices
US stocks closed mostly higher on Friday, after remaining volatile for most of the session, despite Washington’s failure to announce a covid-19 aid package. Investors took solace in the better-than-expected NFP headline numbers, although the figure reported on Friday was meaningfully lower than the previous month’s job additions.
The Dow Jones Industrial Average gained 0.2% to close at 27,433.48 on Friday, gaining 3.8% in the week. After rising 0.1% on Friday, the S&P 500 index, closed the week higher by 2.5%. The Nasdaq Composite spiked 2.5% during the week to close at 11,010.98, following a 3.7% surge in the previous week.
Top US Stocks of the Week
Shares of ADT Inc. (NYSE: ADT) skyrocketed 57% on Monday, after the company announced a long-term partnership with Alphabet (NASDAS: GOOG). According to the terms of the agreement, Google will be investing $450 million in ADT. The stock recorded gains of 42% last week.
Co-Diagnostics, Inc’s (NASDAQ: CODX) shares jumped 28% on Monday, after the company received FDA emergency use authorization for its rapid coronavirus test. The stock pared gains, however, through the course of the next few days, ending the week higher by only 7%.
McKesson Corporation’s (NYSE: MCK) stock climbed 7% after the company posted upbeat Q1 results and lifted its fiscal 2021 earnings guidance. McKesson’s shares gained only around 1% for the week.
Microsoft Corporation’s (NASDAQ: MSFT) shares rose around 6% on Monday after the company confirmed talks with ByteDance to acquire TikTok. Microsoft’s stock ended the week 4% higher.
Shares of Mosaic Company (NYSE: MOS) climbed 14% on better-than-expected Q2 results. The stock gained 28% last week.
Shares of Take-Two Interactive Software, Inc. (NASDAQ: TTWO) rose 6% on Tuesday after the company’s earnings call. Take-Two’s stock gained 7% during the week.
Western Digital Corporation’s (NASDAQ: WDC) shares plummeted 16% after the company reported disappointing Q4 sales and provided downbeat Q1 projections. The stock lost 14% last week.
Shares of Groupon, Inc. (NASDAQ: GRPN) spiked 57% on Friday, after the company reported a narrower-than-expected Q2 loss. Groupon’s stock gained 68% last week.
Uber Technologies Inc’s (NYSE: UBER) stock shed 5% on downbeat Q2 earnings. Despite this, the Uber’s shares ended the week higher by 9%.
Performance of European Indices
European stocks closed mostly higher on the last day of the week, driven by an upbeat jobs report from the US. Market mood was also lifted by Germany reporting a better-than-expected 8.9% improvement in industrial production for June.
The Stoxx Europe 600 Index, which rose 0.3% on Friday, recorded a 2% gain for the week. The German DAX 30 climbed 0.7% on Friday, closing the week higher by around 3%. The French CAC 40 climbed 2.2% last week, while the FTSE 100 index gained 2.3%.
Top European Stocks of the Week
Shares of HSBC Holdings plc (LON: HSBA) declined by 3% on Monday, after the company reported a sharp contraction in its pretax profits in the first half of the year.
Societe Generale SA’s (EPA: GLE) shares lost 1% on Monday after the company posted a Q2 net loss.
Shares of Siemens Healthineers AG (ETR: SHL) tumbled 9% after the German firm announced plans to acquire Varian for $16.4 billion.
Shares of William Hill plc (LON: WMH) spiked 9% on Wednesday, despite the company reporting a massive pretax loss of £14.2 million in the first six months of the year.
Metro Bank’s (LON: MTRO) stock slid 7% after the British bank reported a loss in the first half of the year.
The Forex Market
The British pound remained mostly volatile last week after hitting a four-and-a-half-month high versus the US dollar earlier in the week. The GBP/USD was on track to recovering all the coronavirus-related sell-off in March, but was unable to continue the momentum, recording losses during the week. After losing 0.7% on Friday, the GBP/USD ended the week down by 0.3%.
The Canadian dollar gained for the fourth successive week against the greenback. However, the loonie slipped versus the US dollar on last trading day of the week following jobs report from both countries. The Canadian economy added 418,500 jobs in July, versus a record 952,900 additions in the earlier month, but managed to exceed expectations. The country’s unemployment rate also declined to 10.9% in July. The loonie gained 0.2% versus the US dollar last week.
The Crypto Market
Last week proved to be a positive one for bitcoin, with the cryptocurrency king surging above the $12,000 level on August 2. Although the digital currency pared record gains seen earlier last week, the rally continued even over the weekend, with no signs of a slowdown.