Global stocks higher after weak US jobs, economic data

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February 19, 2021 4:25 PM

Overnight, Wall Street's benchmark S&P 500 index lost 0.4 per cent for its third straight daily decline. The market is likely still on a reflation path, but the way will get choppier from here, said Stephen Innes of Axi in a report. He said improvement requires continued economic growth recovery because government and central bank support already are reflected in asset prices.

Minutes of the Federal Reserve's latest meeting showed central bank officials believe the coronavirus pandemic still poses considerable risks to the economy.

Global stock markets and US futures were mostly higher Friday after disappointing American jobs and economic data. London and Frankfurt rose in early trading while Shanghai, Hong Kong and Seoul closed higher. Tokyo retreated.

Overnight, Wall Street’s benchmark S&P 500 index lost 0.4 per cent for its third straight daily decline. The market is likely still on a reflation path, but the way will get choppier from here, said Stephen Innes of Axi in a report. He said improvement requires continued economic growth recovery because government and central bank support already are reflected in asset prices.

In early trading, the FTSE 100 in London was up less than 0.1 per cent at 6,621.20 while Germany’s DAX gained 0.2 per cent to 13,912.29. The CAC 40 in France advanced 0.2 per cent to 5,741.49.

On Wall Street, futures for the S&P 500 index and Dow Jones Industrial Average were up less than 0.1 per cent.
On Thursday, the Dow lost 0.4 per cent after the U.S. government reported 861,000 people applied for unemployment benefits last week. The Nasdaq Composite tumbled 0.7 per cent.

Minutes of the Federal Reserve’s latest meeting showed central bank officials believe the coronavirus pandemic still poses considerable risks to the economy.

In Washington, Treasury Secretary Janet Yellen urged Congress to avoid cutting President Joe Biden’s proposed USD1.9 trillion aid package. She said the economy is in a deep hole despite signs of improvement.

In Asia, the Shanghai Composite Index rose 0.6 per cent to 3,696.17 while the Nikkei 225 in Tokyo shed 0.7 per cent to 30,017.92. The Hang Seng in Hong Kong gained 0.2 per cent to 30,644.73.

The Kospi in South Korea advanced 0.7 per cent to 3,107.62 and Sydney’s S&P-ASX 200 tumbled 1.3 per cent to 6,793.80.

India’s Sensex lost 0.9per cent to 50,848.50. New Zealand and Southeast Asian markets also retreated.
Also Friday, a preliminary version of Japan’s monthly purchasing managers’ index for manufacturing rose to its highest level in just over two years. That suggested manufacturers are coping with the country’s latest state of emergency better than many people expected.

Stock prices rose over the past six months on optimism about the development of coronavirus vaccines. That sentiment has been dented after renewed infection spikes in the United States and Europe prompted governments to reimpose travel and business curbs.

Shares of GameStop fell 11.4per cent on Thursday. Congress is conducting a hearing on the recent volatility of companies caught in a tug-of-war between Wall Street institutional investors betting against the companies and online retail investors who pushed shares higher.

In energy markets, benchmark U.S. crude fell USD1.10 per barrel to USD59.42 in electronic trading on the New York Mercantile Exchange.

The contract lost 62 cents on Thursday to close at USD60.52. Brent crude, used to price international oils, retreated 92 cents to USD63.02 per barrel in London. It shed 41 cents the previous session to USD63.93. The dollar declined to 105.36 yen from Thursday’s 105.70. The euro gained to USD1.2130 from USD1.2086.

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