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Myanmar Pushes Ahead With Capital-Market Projects Despite Virus

Foreign investment in Myanmar’s fledging capital markets should increase quickly after the pandemic subsides, as the country pushes ahead with new trading platforms for stocks and bonds, according a Securities and Exchange Commission of Myanmar official.

The Southeast Asian nation started allowing foreigners to invest in equities on March 20 — four days before the country reported its first coronavirus cases. That’s one reason foreigners purchased shares in only three of the six listed companies as of July 1, with a combined 175 million kyats (US$128,790) worth changing hands, mainly in First Myanmar Investment Co. Ltd. and Myanmar Thilawa SEZ Holdings Public Ltd.

“If we say we don’t suffer any impacts of Covid-19, then it is just a lie,” Htay Chun, an SEC commissioner, said in a phone interview on Friday. “But it is fair to say that we are not hit as badly as some developed markets.”

Ever Flow River Pcl recently made its debut on the Yangon Stock Exchange despite the coronavirus outbreak, and two other companies, one in the telecom sector and the other an infrastructure developer, have also applied for listing, he said, declining to give the names.

“Post pandemic, we expect to see three or four new main-board listings every year,” he said. “Listed companies can offer foreign investors as many shares as they want,” though a firm’s designation changes into a “foreign entity” if overseas ownership exceeds 35%.

The planned opening of a “pre-listing board” in August has been pushed back to the final quarter of this year, though the goal of having 10 companies at the outset hasn’t changed, Htay Chun said. A program of corporate-bonds issuances has also been delayed, but should see a “pilot run” by December with help from the International Finance Corporation, he said.

The central bank’s recent reduction of interest rates should boost investment in Myanmar’s stock and bond markets, as people with bank deposits may seek alternative, the regulator said. That will also “help attract more foreign investors after Covid-19.”

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Quant Fund Gains 108% by Dumping China Stocks a Day After Buying

A Chinese quant-trading firm made 108% this year by selling every stock bought the previous day.

Zhang Ruiqi, the 34-year-old chairman of Shenzhen Qianhai United Fortune Fund Management Co., screens about a dozen mainland-listed stocks every day for their turnover, momentum and volatility. He then does it all over again the following day. That strategy, which he calls the “all-in-all-out” method, helped his flagship $5 million fund gain 108% this year through June, according to data provider Simuwang.com.

Rather than pick stocks based on their earnings prospects or dividends, quantitative stock funds typically rely on complex and proprietary mathematical models to generate returns. Instead of buy-and-hold, quants are known for their high-frequency trading systems that are well-suited for high turnover markets like China. Quant strategies have become extremely popular globally in the past few years as traditional stock-picking methods struggled to beat equity indexes.

“Our strategy allows us to make money from stocks that have the strongest market sentiment on a day-to-day basis — and that has turned out to be overwhelmingly successful so far this year,” said Zhang in a phone interview from his office in Shenzhen.

High trading volumes have been “essential” to the fund’s success, said Zhang. It has also been helped by certain sectors sustaining gains, particularly stocks associated with technology, health care, agriculture, consumer goods and baijiu liquor. “Market sentiment on hot sectors this year can typically be sustained for about three to five days, or more,” said Zhang. “So our win rate can be quite high by selling quickly.”

The fund includes other parameters to screen which stocks to pick on any given day — including volume, current market value, prices and net inflows. It employs an algorithmic trading mechanism for timing when to buy and sell. Investors in mainland China are not allowed to sell shares on the same day of purchase.

The strategy does have limitations, said Zhang. The bigger the fund’s size, the more market liquidity it needs — to the point where assets under management topping 100 million yuan ($14 million) would hurt the strategy’s effectiveness, he said. The fund is also not immune to extreme market conditions. “If the decline of the fund’s net asset value exceeds 10%, or if its recovery time is too long, we need to re-examine the strategy,” he said.

Further reading
Chinese Stocks at Five-Year High Are Only Just Getting Started
China Convertible Bond Hype Sees $620 Billion Hunt Each Deal
China Accelerates Capital Market Reform to Counter Virus, U.S.
China Investor Buys Dirt Cheap Bank Stocks Nobody Else Wants

He is optimistic on the market’s prospects for the second half. The CSI 300 Index hit its highest level since 2015 on Friday and leverage is at a five-year high, demonstrating the return of risk appetite at a time Beijing is speeding up efforts to boost stock trading. Total average daily trading volume has hit more than 740 billion yuan so far this year, around 45% higher than that of the full year of 2019, according to data compiled by Bloomberg.

“As long as the trading volume remains above 400 billion yuan per day, this strategy will still be effective.” said Zhang, noting the upcoming revamp of the Shanghai Composite Index and ChiNext market reforms. “Volumes are unlikely to drop.”

— With assistance by Sharon Chen, Ken Wang, John Cheng, Mengchen Lu, and Kevin Dharmawan

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'We may have a blow-up': Famed investor Jim Rogers explains how central bank 'madness' has the stock market hurtling towards another crash

  • Jim Rogers, the chairman of Rogers Holdings, thinks a "blow-up" may be in the cards for the US stock market.
  • Rogers leans on central bank and fiscal policy, along with historical precedents, in order to bolster his argument.
  • Rogers says we can expect more money printing and government spending at least until the US elections in November. 
  • "This is insane," Rogers says.
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"I am not very good at timing the market, but I suspect we may have a blow-up at least in the American stock market, and maybe the Japanese stock market, because of all this madness that is going on."

That's what Jim Rogers, the chairman of Rogers Holdings, said in an Economic Times op-ed partly titled "There will soon be a blow-up in US and, possibly, Japanese markets."

The aforementioned "madness" Rogers refers to is none other than the confluence of unprecedented central-bank and fiscal aid. These coronavirus crisis-era measures have stoked concerns that monetary authorities are creating asset bubbles that would become vulnerable as policy support is withdrawn.

"The main thing that is going on in the world is that central banks all over the world are printing huge amounts of money and governments are borrowing and spending huge amounts of money," he said. "This is insane."

Here's what the Federal Reserve has been up to since the crisis shuttered huge swaths of the US economy mid-March:

  • Cut interest rates to zero
  • Announced unlimited quantitative easing
  • Started purchasing corporate bonds 
  • Announced an initiative to buy state and local bonds

As a result, the Fed's balance sheet has ballooned to colossal proportions. Below is a snapshot of the Federal Reserve's balance sheet. Today, it tops $7 trillion.

But Rogers has danced this dance before. He has a long history on Wall Street, having cofounded the legendary Quantum Fund with billionaire investor George Soros in the 1970s.

"The end game?" he asked. "Well often in history, after a long rise in the market, it turns into a blow of bubble, especially when there is a huge amount of money that suddenly comes in."

Today, it seems plausible that markets have met the historical precedents Rogers refers to above. Prior to the fastest bear market in history, stocks enjoyed the longest bull market on record. Now, in just a few months time, the Fed has expanded its balance sheet by approximately $3 trillion.

Although Rogers isn't putting a timetable on the impending "blow-up," he says we can expect more money printing and low interest rates as the US gears up for an election.

"In Washington, they are doing everything they can to get re-elected," Rogers said. 

He added, "That is what they do. They do not care about us. They do not care about our children. They care about getting elected," he said. "So until November anyway, this is all going to continue in the US."

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European Bonds to Bask in Sunny Spell as Debt Supply Evaporates

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Europe’s bond markets look set to have a warm July as the European Central Bank’s asset purchases keep running and hefty government debt issuance slows down for the summer.

This month could see 57 billion euros ($64 billion) of spare cash chasing assets, according to Citigroup Inc.’s Saumesh Dutta, since the ECB’s buying along with coupon payments and redemptions to investors will more than soak up any debt sales.

That should be “very supportive” for European government bonds, particularly French ones, Dutta said in a note. The prospects for the remainder of the year are even better, according to Bank of America strategist Erjon Satko, who expects bond sales to be countered by cash in excess of 222 billion euros, the most since 2017.

“The size of reinvestment flows (including all ECB QE programs) are picking up materially in July, September and October,” Satko wrote in a note.

European bond investors will also be looking for progress on the European Union’s proposals for a coronavirus recovery fund next week, given member states remain deeply divided on the stimulus. Gilt traders will be watching U.K. Chancellor Rishi Sunak’s address to Parliament on July 8, when he is expected to announce new measures to boost the economy.

Slow Sales

Bond issuance next week is set to slow rapidly. Germany will offer a new five-year note, while Austria and Ireland also have sales, and there are no bond coupons or redemptions to be paid. Germany still has 150 billion euros of supply to be done in 2020, more than at this time last year, said Jorge Garayo, a rates strategist at Societe Generale SA.

Italy will sell a new BTP Futura bond to retail investors, demand for which is unpredictable, according to LSEG Borsa Italiana’s fixed-income head Pietro Poletto. There may be further opportunistic selling from its Treasury with a seven-year offering through banks.

U.K. debt sales are also set to slow, to 7 billion pounds across three sales, one of which is an inflation-linked bond.

  • European Council president Charles Michel will unveil a compromise proposal on the recovery fund proposal next week
  • Data for the coming week is thin and mostly relegated to second-tier, backward-looking figures, providing few clues on the state of economic recovery from the coronavirus pandemic
    • Euro area Sentix investor confidence for July on Monday is the only forward-looking number; German factory orders for May are also published Monday followed by industrial production for the same month Tuesday
    • The U.K.’s data calendar is also light, leaving investors to focus on June construction PMI numbers from Markit/CIPS on Monday after BOE policy maker Jonathan Haskel said some activity was returning to the housing market

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The Mass Exodus From Beijing Is On

People in Beijing rushed to buy train and plane tickets out of the Chinese capital after the local government began easing travel restrictions for the first time since an outbreak that was discovered in mid-June.

Residents from areas of Beijing designated “low risk” will be allowed to leave the city without having to be tested negative for the coronavirus from July 4, Pan Xuhong, deputy director of the Beijing Municipal Bureau of Public Security said on Friday. Strict controls will remain on people from dozens of medium and high risk areas.

Within 30 minutes of the announcement, searches for outbound flights increased five times compared with the same period the day before, and there was a nearly 350% rise in searches for hotel stays in the next two weeks, Beijing Daily reported, citing data from Tongcheng Travel. Qunar, a Chinese travel platform, said that plane and train ticket sales more than doubled within an hour, according to the local newspaper.

A similar surge in travel demand occurred in April, when Beijing lowered its emergency response level for the first time since the epidemic first began in January. Life was just returning to normal in June when residents were again put under severe restrictions after an outbreak was discovered in the city’s biggest wholesale market, prompting local officials to shut schools and lock down some housing compounds.

‘A Tragic Year’: How Beijingers Are Handling Their Second Wave

The change in regulations announced Friday make it easier for people from low risk areas to leave the city. However, local governments in other provinces get to decide whether or not people arriving from Beijing have to be tested or quarantined, and the rules vary across the country.

The cluster of infections in Beijing, which grew to 331 in less than a month, threatened China’s nascent economic recovery and posed a test for its top leaders who had promoted a narrative that they handled the pandemic better than many western nations. The city reported two new cases on July 2.

Beijing opted not to employ the same citywide lockdown that was used to stem flareups in other parts of China, in order to keep the economy running in the city of more than 20 million where the country’s business and political elite reside. Instead, authorities relied on an aggressive testing and contact tracing campaign and a “health code” system available through residents’ mobile phones that can show whether someone is at risk of being infected.

— With assistance by Sharon Chen, and Dong Cao

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A breakdown of where the jobs are coming back and where they may never fully return

  • CNBC studied the short-term and long-term employment changes in a variety of sub-industries to isolate Covid-19 from more-enduring trends.
  • One economist said the road to total employment recovery may take years for certain sectors — or worse, never occur. 
  • "Employment in clothing stores is up 202K! But it's still down 40% compared to last year," wrote former Labor Department economist Betsey Stevenson.

The U.S. economy added back millions of jobs in June thanks to rehiring in hard-hit industries like leisure and hospitality.

But for some sectors, the road to pre-coronavirus employment recovery may take years — or worse, never occur. Some now say that the coronavirus and efforts to contain its spread could act as a catalyst for layoffs that may not be fully recouped.

CNBC studied both the short-term and long-term employment changes in a variety of the economy's sub-industries to isolate the recent impact of Covid-19 from more-enduring trends.

Zoom In IconArrows pointing outwards

One industry that could have a particularly hard time bouncing back is apparel retail. Economists have for years documented a marked decline in U.S. brick-and-mortar retail jobs at the hands of online shopping.

And now, despite a sizable rebound of 202,000 clothing retail jobs in June, it remains to be seen whether the broader retail sector will be able to make a complete recovery in employment figures.

The most recent data studied by CNBC came in the Labor Department's monthly jobs report, which showed U.S. employers added some 4.8 million back to payrolls in June and pushed the unemployment rate down to 11.1%.

Zoom In IconArrows pointing outwards

But both stocks and bond yields moved off their session highs within a couple of hours of the report as economists and investors alike began to doubt the longevity of the headline jobs strength and uneven rehiring.

A grim prognosis for clothing retailers came Thursday morning from Betsey Stevenson, former chief economist at the Labor Department. 

Stevenson, who also served on former President Barack Obama's Council of Economic Advisers, wrote on Twitter that June's bounce in clothing store employment won't do much to stanch the long-term decline in apparel retail jobs.

"Employment in clothing stores is up 202K! But it's still down 40% compared to last year," she wrote. "Many of those jobs are never coming back."

Another industry that may have a more difficult time returning to prior employment levels is mining, and specifically coal mining.

The coal mining industry, which employed some 70,000 people at the end of 2014, lost 27% of its workforce through January 2020 before the Covid-19 layoffs.

But between January and June, the coal industry has lost another 14% of workers. Halfway through last month, the sub-industry had just under 44,000 workers.

Other industries, though hard hit amid Covid-19 lockdowns, are showing signs of a more robust employment rebound.

Leisure and hospitality, which includes restaurants and bars, perhaps bore the worst of the coronavirus layoffs amid an eye-popping contraction in travel and dining out. In early May, the Labor Department reported that the leisure and hospitality industry had lost 47% of its entire workforce during the month of April alone.

But many of those workers were likely placed on temporary leave, or furloughed, and appear to be returning to work at a faster rate than those in other industries. 

Bars and restaurants employed 12.3 million Americans in February 2020, only to see that figure collapse to 6.2 million in April. It's since rebounded 47% off that low and for June rose to 9.2 million jobs.

Another industry that has shown resiliency in recent months — and strength in recent years — is couriers and messengers. This sub-industry includes the U.S. employees who deliver parcels and mail both across states and on a local basis.

In fact, demand for e-commerce amid the coronavirus has corresponded to a net increase in the number of people working in the industry. The courier and messenger industry employed 859,000 people in January, 861,000 people in April and 904,000 in June, according to the Labor Department.

CNBC's John Schoen contributed reporting.

Correction: Betsey Stevenson served on the Council of Economic Advisers. An earlier version misstated the name of the entity.

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10 Unusual High-Profile Analyst Upgrades as Stocks Surge Into July: Akamai, Amazon,eBay, Shopify, Tesla* More

With stocks surging at the start of July and with COVID-19 cases rising rapidly in America, the economy finds itself in a bit of a jam. It seems impossible to rationalize that the largest technology stocks in America are all challenging all-time highs in the midst of an atrocious recession. And that is exactly where we are at this time. Many investors did not catch the bulk of the recovery after March’s selling zenith had investors so worried, and this has investors looking for any new ideas they can find for how to be positioned for the second half of 2020.

24/7 Wall St. reviews dozens of analyst research reports each day of the week and it turns out to be hundreds of analyst calls each week. Our goal is to find some of those new ideas that investors can consider for their own portfolios. And out of the calla from the week of July 2 there were several unusual analyst upgrades and price target hikes that stood out above and beyond the rest of the analyst calls. As for why they were unusual was unique to each stock, but some of these are now among the most aggressive analyst calls on Wall Street.

One warning that every reader should consider is that n single analyst call should ever be used as a sole reason to buy (or sell) a stock. And if these are unusual upgrades and target hikes, then even more additional research and due diligence should be used before blindly chasing the calls with the hopes that the bull market can just keep chugging higher and higher.

Before getting into the calls, it is important to understand just where the markets are after the 2020 COVID-19 crash and recession were followed by the strongest snap-back recovery. The S&P 500 was back above 3,100 on July 2 after challenging 2,200 during the peak selling pressure in March. It barely took a month from February to March to lose 35%, but the S&P 500 was up about 43% from its absolute March lows at the start of July. That is not normal market behavior and it should make some of the more unusual analyst upgrades at the highs stand out even more.

Here are 10 high-profile unusual analyst upgrades where price targets were vaulted or higher or where ratings and targets were hiked during the week of July 2, 2020.

Akamai Playing Catch-Up

Akamai Technologies, Inc. (NASDAQ: AKAM) may sound like one of those “better late than never” as the internet infrastructure and content speed-boosting player was raised to Outperform from Market Perform at Cowen & Co. on July 2. The firm raised its price target up to $150 from $107, and while that was a against a $106.33 prior close a headline indicated that this move above $113.00 was a 20-year high. Analysts are not known for upgrades at the bottom of a trend, but this stock was at $80 at the peak of the panic selling in March and the consensus target price of $112.82 is now under the share price.

Akamai’s prior street-high target was just $130, so this call stood out. Cowen’s Colby Synesael is effectively noting how the stock needs to play catch-up as it has not risen as much as other internet infrastructure plays during the stay-at-home trends.

Amazon Rides the Bezos Spaceship

Amazon.com Inc. (NASDAQ: AMZN) was reiterated as Buy and its price target was raised to $3,500 from $2,800 at Monness Crespi Hardt on June 29. This was a new street-high analyst target, and the stock has been receiving multiple target hikes that were not as aggressive as this target price. The MCH upgrade was based on having the key infrastructure and capabilities, along with the financial strength, to endure and win in the COVID-19 era.

Amazon shares have traded at a high above $2,950 now and it may now have the world’s highest brand value. What is interesting there is that this was the same quarter that Jeff Bezos warned it would be reinvesting almost all of profits into the team of employees and into the company as it positions itself for the future. Amazon’s consensus analyst target price is closer to $2,815.

Avis Budget Still Driving

Avis Budget Group, Inc. (NASDAQ: CAR) was raised to Overweight from Equal Weight with a $37 price target at Morgan Stanley on July 2. The call was versus a $22.48 prior close and it sent Avis Budget shares up 13% to $25.50 late on Thursday. Avis Budget had a $32.00 consensus analyst target price ahead of the call.

While the call is very positive, the travel industry is facing a whammy as COVID-19 cases surge higher and as summer travel plans are being harmed by states dialing down some of their reopening efforts.

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These 6 charts from the June jobs report show how much the economy has recovered — and how much further it has to go

  • The June jobs report released Thursday from the Bureau of Labor Statistics showed that the economy added 4.8 million payrolls during the month, and that the unemployment rate declined to 11.1%.
  • It marks the second month in a row that the nonfarm payrolls report has exceeded expectations. 
  • Here are six charts that show how much the US labor market has rebounded so far in the pandemic recession recovery, and how much further there is to go before reaching pre-crisis levels. 
  • Visit Business Insider's homepage for more stories.

The labor market recovery continued in June as states across the US reopened their economies following coronavirus-pandemic lockdowns earlier in the year. 

The report released Thursday from the labor department showed that the economy added 4.8 million jobs during the month, and that the unemployment rate declined to 11.1% from 13.3% in May.

The June report also marks the second month in a row that nonfarm payrolls have exceeded economists' expectations, showing just how swiftly the US economy has recovered since starting the reopening process. Economists had expected 3 million jobs added, and the unemployment rate to decline to 12.5% in June. 

In May, economists expecting a dismal report were shocked when the US added a revised 2.7 million jobs, and saw the unemployment rate declined to 13.3% from 14.7%. 

"The bounce is impressive and welcome but there is a long road ahead to restore all the jobs that were lost in this recession," Bank of America economists led by Michelle Meyer wrote in a Thursday note. 

President Donald Trump cheered the results in a Thursday press conference, saying "today's announcement proves that our economy is roaring back, it's coming back extremely strong," adding that there are some places where "we are putting out the flames." 

Read more: A 22-year market vet explains why stocks are headed for a 'massive reset' as the economy struggles to recover from COVID-19 — and outlines why that will put mega-cap tech companies in serious danger

US stocks went higher after the report, with all three major indexes posting gains. 

While the report shows that the economic recovery from the pandemic recession progressed in June, there is still a long way to go before the labor market is at pre-crisis levels. Even though the US economy has added 7.5 million jobs in the last two months, it still has to add about 15 million more to break even from coronavirus pandemic losses. 

And, there could be trouble ahead — the June report reflects only the first half of the month, before spiking coronavirus cases led more than 20 states and cities to either rollback or pause reopening plans. 

"June is a tale of two cities," Becky Frankiewicz, ManpowerGroup North America president, told Business Insider.

"The first few weeks of June were strong, continuing a nice optimistic trend, and the last two weeks really slowed," she said, adding that the pullback was likely due to hiring slowing in states that rolled back or paused reopening efforts. 

And, while jobs were added, elevated layoffs persist. In a report released simultaneously on Thursday, the Labor Department showed that 1.4 million Americans filed for unemployment insurance last week. 

Read more: The most accurate tech analyst on Wall Street says these 6 stocks have potential for huge gains as they transform the sector

For the full impact of paused plans, re-instated restrictions, and continued layoffs, economists and industry watchers will have to wait for the July report, due in August. 

Here are six charts from the June jobs report that show how much progress the US labor market has made so far, and how much further there is left to go before there's a full recovery. 

1. The US economy added a record 4.8 million jobs in June, following a revised 2.7 million jobs added in May.

The second month of record job gains came mostly from payrolls added in leisure and hospitality, which gained 2.1 million jobs in June.

Employment also jumped by 740,00 in retail trade and 568,000 in education and health services during the month. Manufacturing, transportation, and construction all added jobs in June.

Still, it's important to remember that in all industries, employment remains far below pre-crisis levels. For example, while food services and drinking places (part of leisure and hospitality) added 1.5 million jobs in June after a similar addition in May, it remains 3.1 million payrolls below its February level. 

Read more: Real-estate investor Joe Fairless breaks down how he went from 4 single-family rentals to overseeing 7,000 units worth $900 million — and outlines the epiphany that turbocharged his career

2. The unemployment rate also ticked down slightly to 11.1% from 13.3% a month earlier.

In addition, the misclassification error, which had likely weighed down the unemployment rate in previous months, "declined considerably in June," the BLS wrote in the report. 

The error was that a large number of people were being classified as employed but absent from work for "other reasons," when they should probably have been counted as unemployed on temporary layoff.

In June, if all workers had been counted correctly, the unemployment rate would have been one percentage point higher, but still down from the previous month. 

Read more: Stock analysts are having a moment in the sun as the market gets flipped upside down. We spoke to 11 of the top-ranked on Wall Street to get their forecasts and single-stock picks.

3. A broader measure of unemployment, called the underemployment rate, or U-6, also declined in June.

The underemployment rate includes workers who say they want a job but haven't been actively looking for one, and people who are working part-time but want a full-time job.

In June, the U-6 rate declined to a seasonally adjusted 18% from from 21.7% in May. Still, its the third month in a row that the rate has remained elevated near 20%. 

Read more: GOLDMAN SACHS: Buy these 15 super-cheap stocks now before their prices catch up to their strong growth and earnings prospects

4. The labor force participation rate, or the share of Americans either working or looking for a job, increased for the second month in a row.

As people went back to work in June, the labor force participation rate ticked up. In addition, reentrants to the workforce, meaning people who previously worked but were not in the labor force prior to beginning a job search, increased by 711,000 to 2.4 million in June. 

Still, labor force participation is much lower than it was pre-pandemic, as millions of Americans remain on the sidelines. 

Read more: Goldman Sachs has formulated a strategy that could triple the market's return within a year as volatility remains higher than normal — including 11 new stock picks for the months ahead

5. The employment-to-population ratio also increased as people went back to work.

The employment-to-population ratio, which measures the percentage of the population that is currently working, rose to 54.6% in June from 52.8% in May.

Still, the ratio remains well below its pre-pandemic level of 61.2% in February. 

6. Although unemployment declined overall, the rate increased for Black men in June. Minority workers and women also continue to see joblessness at higher rates than whites and men.

While headline unemployment ticked down in June, minorities and women still have higher rates of joblessness than white workers and men. 

In June, the unemployment rate fell to 10.2% for men and 11.2% for women. The white unemployment rate declined to 10.1%, the Black unemployment rate fell to 15.4%, and the Hispanic rate was 14.5%. The unemployment rate for Asians was 13.8%, little changed from May. 

There was one outlier in the report — the unemployment rate for Black men increased to 16.3% in June, and is now at the pandemic-recession high. 

While it's not immediately clear what led to the increase for Black men, it could be due to the "last hired, first fired" trend, Olugbenga Ajilore, senior economist at the Center for American Progress, told Business Insider. 

He also noted the unemployment overall is highly elevated, and that the only group that doesn't have a double-digit unemployment rate is white men. "We shouldn't get used to double-digit unemployment rates," said Ajilore. 

Do you have a personal experience with the coronavirus you’d like to share? Or a tip on how your town or community is handling the pandemic? Please email c[email protected] and tell us your story.

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Shanghai stocks jump 2% as data shows China's services sector grew in June; U.S. jobs report beats expectations

  • Shares in Asia rose on Friday, with the Shanghai composite rising about 2% on the day.
  • A private survey showed Friday that China's services sector showed it growing at its fastest pace in over a decade in June, according to Reuters, with the Caixin/Markit services Purchasing Manager's Index coming in at 58.4 for the month.
  • Nonfarm payrolls surged by 4.8 million in June, according to the U.S. Labor Department. The figure smashed expectations by economists surveyed by Dow Jones of a 2.9 million increase in jobs created.
  • The Labor Department also said, however, that initial jobless claims rose by 1.427 million in the week ending June 27. Economists polled by Dow Jones expected initial U.S. jobless claims to rise by another 1.38 million.

Stocks in Asia rose on Friday as positive economic data raised optimism over the prospects of an economic recovery from the coronavirus pandemic.

Mainland Chinese stocks were among the region's biggest gainers on the day, with the Shanghai composite surging 2.01% to around 3,152.81 while the Shenzhen component added 1.335% to about 12,433.26.

Hong Kong's Hang Seng index was around 1.1% higher, as of its final hour of trading.

In Japan, the Nikkei 225 added 0.72% to close at 22,306.48 while the Topix index ended its trading day 0.62% higher at 1,552.33.

South Korea's Kospi advanced 0.8% to close at 2,152.41. Shares of SK Biopharmaceuticals skyrocketed 29.92% to see gains for a second day following its blockbuster IPO on Thursday.

Over in Australia, the S&P/ASX 200 finished its trading day 0.42% higher at 6,057.90.

Overall, the MSCI Asia ex-Japan index gained 1.03%.

A private survey showed Friday that China's services sector showed it growing at its fastest pace in over a decade in June, according to Reuters, with the Caixin/Markit services Purchasing Manager's Index (PMI) coming in at 58.4 for the month. That was the highest print since April 2010, according to Reuters, and compared with May's 55.0 reading. The 50 level in PMI readings separates growth from contraction on a monthly basis.

In the U.S., nonfarm payrolls surged by 4.8 million in June, according to the U.S. Labor Department. The figure smashed expectations by economists surveyed by Dow Jones of a 2.9 million increase in jobs created. The unemployment rate dropped to 11.1%, lower than the 12.4% forecast by economists surveyed by Dow Jones.

The Labor Department also said, however, that initial jobless claims rose by 1.427 million in the week ending June 27. Economists polled by Dow Jones expected initial U.S. jobless claims to rise by another 1.38 million.

Rodrigo Catril, senior foreign exchange strategist at National Australia Bank, wrote in a note that the nonfarm payrolls and jobless claims data "delivered contrasting images" of the state of the U.S. labor market.

"While June data reflected a big improvement in the US labour market, the recent sharp acceleration in new virus cases plus the prospect of an end to unemployment benefits by the end of July are two big layers of uncertainty," Catril said. Numerous states in the U.S. have paused or reversed plans to ease restrictions as new coronavirus cases spiked countrywide. 

Nomura's Chetan Seth told CNBC's "Street Signs" on Friday that markets are "trading on incremental economic data."

"The question from here on is: Can you see continued economic data beats?," asked Seth, who is Asia-Pacific equity strategist at the firm. "The moment we start seeing some disappointment, I guess the market will probably not like it."

Oil prices slipped in the afternoon of Asian trading hours, with international benchmark Brent crude futures down 0.72% to $42.83 per barrel. The U.S. crude futures contract shed 0.81% to $40.32 per barrel.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 97.2 after earlier touching a high of 97.291.

The Japanese yen traded at 107.48 per dollar after seeing lows beyond 108 earlier in the trading week. The Australian dollar changed hands at $0.6937 following its rise this week from levels around $0.684.

— CNBC's Fred Imbert contributed to this report.

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Think tank explains why it's 'pointless' to delist Chinese companies from U.S. stock markets

  • Delisting Chinese companies from U.S. stock exchanges will neither deny those firms access to American capital markets nor hurt China's growth, said a Peterson Institute for International Economics report.
  • There are other ways Chinese companies can get money from American investors, including through the private equity market and Hong Kong's stock market, according to the report.
  • U.S.-China relations are the worst they have been in decades, with President Donald Trump warning last month that "a complete decoupling from China" remained a policy option for his administration.

Delisting Chinese companies from U.S. stock exchanges is "a pointless drive" that will neither deny those firms access to American capital markets nor hurt China's growth, according to a report by think tank Peterson Institute for International Economics.

U.S.-China relations are the worst they have been in decades and the stock market appeared to be one of the latest fronts where tensions between the two countries are playing out. The Senate in May passed a bill that could ban many Chinese companies from listing shares in the U.S. Last month, President Donald Trump urged regulators to find ways to tighten scrutiny on those firms.

But there are several ways that Chinese companies can still get money from American investors, including through the private equity market and Hong Kong's stock market, said the PIIE report written by Nicholas Lardy and Tianlei Huang.

"The key point is that the market for capital is global. Shutting out Chinese firms from listing in the United States would not deny these firms access to US capital," the authors wrote.

There are about 230 Chinese companies — totaling about $1.8 trillion in market capitalization — listed on the Nasdaq and New York Stock Exchange, noted the report.

It pointed out that U.S. private equity firms have been buying out those listed Chinese companies. One example is Warburg Pincus and General Atlantic, which recently led a deal to take Chinese tech firm 58.com private, said PIIE.   

In addition, an increasing number of U.S.-listed Chinese companies have sought secondary listings in Hong Kong — a financial and business center in Asia that is open to international investors, said the report. Chinese companies that have launched secondary offerings in Hong Kong include major tech players Alibaba, JD.com and NetEase.

"US institutional investors and US residents who want to own shares in these companies will simply buy them in Hong Kong. Similarly, foreign investors who have invested in Chinese companies via New York listings will buy them in Hong Kong," read the report.

'Unlikely' decoupling

The difficulties in totally cutting Chinese companies off from U.S. investors underscore how interdependent the world's top two economies have become.

That integration looks likely to increase — especially in the financial sector — despite Trump's warning last month that "a complete decoupling from China" remained a policy option, said PIIE.

U.S. financial institutions are increasing their presence in China, where authorities are gradually loosening rules on foreign ownership. PIIE listed examples of American companies that have taken advantage of China's opening up its financial sector:

  • Goldman Sachs in March 2020 received approval to increase its stake in its joint venture securities firm, Goldman Sachs Gao Hua Securities, from 33% to 51%;
  • At the same time, Morgan Stanley similarly was allowed to increase its stake in its joint venture securities firm, Morgan Stanley Huaxin Securities, from 49% to 51%;
  • Just last month, American Express got the approval to be the first foreign credit card company to launch onshore operations in China through a joint venture.

Such developments will make financial decoupling between the U.S. and China "increasingly unlikely," wrote the PIIE authors.

"For all the fireworks over tariffs and investment restrictions, China's integration into global financial markets continues apace," they said.

"Indeed, that integration appears on most metrics to have accelerated over the past year. And US-based financial institutions are actively participating in this process, making financial decoupling between the United States and China increasingly unlikely."

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