Tokyo and Hong Kong declined while most other regional markets advanced. U.S. futures edged lower after Wall Street capped a milestone-shattering week Friday with stock indexes hitting more record highs as investors welcomed a report showing the nation's job market was even stronger last month than expected.
Shares were mixed Monday in Asia in quiet trading, with US markets set to be closed for observance of Independence Day. Tokyo and Hong Kong declined while most other regional markets advanced. U.S. futures edged lower after Wall Street capped a milestone-shattering week Friday with stock indexes hitting more record highs as investors welcomed a report showing the nation’s job market was even stronger last month than expected.
Oil prices slipped as the United Arab Emirates pushed back against a plan by the OPEC oil cartel and allied producing countries to extend the global pact to cut oil production beyond April 2022. Benchmark U.S. crude oil lost 11 cents to USD 75.05 per barrel in electronic trading on the New York Mercantile Exchange. It shed 7 cents on Friday to USD 75.16 per barrel. Brench crude, the international standard, gave up 8 cents to USD 76.09 per barrel.
One of the group’s largest oil producers, the UAE is seeking to increase its output setting up a contest with ally and OPEC heavyweight Saudi Arabia, which has led a push to keep a tight lid on production.
The combined OPEC Plus grouping of members led by Saudi Arabia and non-members, chief among them Russia, failed to reach an agreement Friday on oil output. Negotiations over the dispute are set to resume Monday. Worries remain across Asia about rising coronavirus cases as outbreaks of new infections overtake vaccination efforts. In Thailand and Indonesia, local authorities have reported record high new cases.
Tokyo’s Nikkei 225 lost 0.6 per cent to 28,618.33 and the Hang Seng in Hong Kong declined 0.5 per cent to 28,166.25. The Shanghai Composite index gained 0.2 per cent to 3,524.30 and South Korea’s Kospi picked up 0.4 per cent to 3,294.08. In Australia, the S&P/ASX edged 0.1 per cent higher to 7,316.30. China announced over the weekend that Chinese ride-hailing service Didi would be removed from app stores in the country in the latest blow after its shares began trading in New York on June 30.
The U.S.-listed shares of Didi slumped 5.3 per cent on Friday after China’s internet watchdog said it launched an investigation into the company to protect national security and public interest.
On Friday, the S&P 500 rose 0.8 per cent, its seventh straight gain and seventh consecutive all-time high. The benchmark index also notched its second weekly gain in a row. The Nasdaq also set a record, getting a boost from technology stocks, which led the broad market rally. The only laggards were energy stocks and banks, which fell as Treasury yields headed lower.
A U.S. government report said employers hired 850,000 more workers than they cut last month, a healthier reading than the 700,000 economists expected and an acceleration following a couple months of disappointing growth. Still, unemployment remains well above the 3.5 per cent rate that prevailed before the pandemic struck, and the economy remains 6.8 million jobs short of its pre-pandemic level. And while wages grew in June, the increase was less than expected, a good sign for investors worried about inflation pressures.
Economists took the report as a sign that workers will return to work as more people get vaccinated and the pandemic eases. Perhaps more importantly for markets, some said the numbers likely mean the Federal Reserve can stay on the course it’s set, keeping interest rates low for a while longer to support the economy.
The S&P 500 rose 32.40 points to 4,352.34. The Dow Jones Industrial Average gained 0.4 per cent to 34,786.35. The Nasdaq composite added 0.8 per cent to 14,639.33. Smaller stocks in the Russell 2000 lagged. The index fell 1 per cent to 2,305.76. Treasury yields were steady Monday at 1.43 per cent.
Low interest rates help drive up prices for all kinds of stocks, but they provide particularly powerful fuel for high-growth companies whose prices may otherwise look expensive. In currency trading, the dollar was at 111.12 Japanese yen, up from 110.99 yen. The euro slipped to USD 1.1857 from 1.1863.