The FTSE 100 continued it’s march higher on Monday as London’s large cap index briefly traded above 6,500, the highest levels for three months.

The rise in equities follows a bumper US jobs report that pointed to 2.5 million jobs being added to the US economy in May, as opposed to a loss of 8 million jobs.

The shock jobs data suggests the post-coronavirus lockdown is well ahead of all economist expectations, and has fuelled appetite for risk assets such as equities.

However, not all economic data has been as positive with Eurozone GDP falling 3.2% in the first quarter and German export data showed further economic contraction with exports falling 15% in April.

Nonetheless, analysts see these softer economic readings as being largely priced into equity markets and instead are focusing on the reopening of economies and associated recovery.

“The market continues to view all of these economic reports as rear-view mirror stuff, as optimism over economic re-openings continues to drive sentiment,” said Michael Hewson, chief market analyst at CMC Markets.

Global jobs

The US jobs report has caused short term optimism but multinational companies are still navigating lower demand. Government schemes such a the UK’s furlough scheme have provided support to employers thus far but will soon evaporate.

Signalling the longer term impact of the coronavirus lockdown, markets assessed further job cuts to major global brands listed on the UK’s exchanges.

FTSE 100 oil major BP announced they were to cut 10,000 of their global workforce whilst luxury fashion brand Mulberry said they were going to slash their staff by 25%.

The BBC reported BP CEO said in an email to staff: “The oil price has plunged well below the level we need to turn a profit.”

“We are spending much, much more than we make – I am talking millions of dollars, every day.”

If this proves to be a theme throughout other industries, the US jobs report and subsequent optimism in stock markets could prove premature.

Travel and leisure shares

The FTSE 100’s travel shares have flown over the past week and were again among the risers on Monday despite a 14-day quarantine coming into effect.

“The surge in travel- and airline-related names comes on the day when the UK implements a quarantine for overseas travel, perhaps the very definition of shutting stable doors after the horse has bolted,” said Chris Beauchamp, Chief Market Analyst at IG.

“With lockdowns easing across Europe and no sign of a second infection wave, this move has been staunchly opposed by airlines, and it looks like the market expects the restriction to remain in place for only a limited time,” Beauchamp said.