Dire US jobs numbers drive further selloff for global markets amid Covid-19 fallout

Dire US jobs numbers drive further selloff for global markets amid Covid-19 fallout

Global stock markets sank following more signs that the Covid-19 pandemic would take a massive toll on economic growth, while oil prices continued to rally on hopes of a cut to global supply.

Investors sought out safe havens in the dollar and government bonds, as US payrolls fell by the largest amount since March 2009, ending a record 113 straight months of job growth. 

Morgan Stanley said the US economy will shrink 5.5% in 2020, the steepest drop since 1946, with a huge 38% contraction predicted for the second quarter. 

In Europe, a number of firms flagged a hit to business from the pandemic caused by the new coronavirus, foreshadowing a deeper earnings recession ahead of the reporting season. Ireland’’s Iseq index fell a further 2%, as the heavyweights Bank of Ireland and AIB fell again.

Bank of Ireland shares slid 5% as it said it had extend its tie-up in Britain with tye AA to provide car finance and personal loans.                  

Other big losses in the session were posted by building materials firm Kingspan, down 5.5%, and by international food firm Glanbia,which fell 7.4%. Kerry Group shares ended 3% lower. 

“Global recession fears are now being confirmed by the incoming economic prints,” said Han Tan, market analyst at FXTM.

“Until the virus case count peaks and the business earnings outlook improves, risk sentiment may only experience fleeting bouts of positivity,” he said.

“You have to take into consideration this isn’t the full impact just yet,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York, adding that he expects “further erosion in the [US] job market in the months ahead.” 

"To mangle a phrase, we are not at the beginning of the end, or even the end of the beginning; to all intents and purposes, we are barely past the very beginning of the crisis. Months of dire economic data lie ahead of not just the US economy," said Chris Beauchamp at online broker IG. Brent crude gained almost 9% to $32.62 a barrel. Reuters and Irish Examiner 

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