NEW YORK (Reuters) – Oil markets and global stock markets fell and the dollar rose on Thursday as a poor reading of the U.S. labor market added to concerns that economic recovery in the United States could be slower than previously expected.
FILE PHOTO: Signage is seen outside the entrance of the London Stock Exchange in London, Britain. 23 Aug 2018. REUTERS / Peter Nicholls
A surprise jump in U.S. unemployment claims to more than $ 1 million in the week ended Aug. 15, reported on Thursday, reinforcing Federal Reserve’s bearish remarks on Wednesday that said job growth had slowed.
The new reading of jobless claims was well above the forecast of economists surveyed by Reuters who expected 925,000 new applications last week.
“There’s always concerns about the economic recovery, which always hurts,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.
Although the long-term outlook for the economy is good, the latest unemployment rate and Fed remarks show “economic weakness is by no means over,” he added.
The concerns raise value and economically sensitive stocks, but have left tech and tech-related stocks relatively untouched.
Oil prices fell as large producers warned of a risk of seeking recovery.
Brent crude futures were up 79 cents to $ 44.58 a barrel, while US crude futures slipped $ 1.29 to $ 41.64 a barrel.
European equities and U.S. equities are waiting for the MSCI benchmark for global equities index. The index was down 0.24% to 571.95 while its index for emerging markets fell 0.5%.
European broad FTSEurofirst 300 index fell 1.15% to 1.418.1.
On Wall Street, the Dow Jones Industrial Average fell 0.03%, the S&P 500 lost 0.07% and the Nasdaq Composite added 0.3%.
The dollar had gained ground since hitting a 27-month low that hit it on Tuesday. On Thursday, the dollar index was down 0.002%, with the euro unchanged at $ 1,836.0.024%.
The Japanese yen strengthened 0.15% against the greenback at 105.95 per dollar.
Wall Street was demolished on Wednesday from its recent highs after minutes from the Fed of its July meeting spoke to investors by showing that the rapid rebound of the labor market in May and June was likely to slow.
The S&P 500 had reached an all-time high earlier in the week when prices returned to their pre-pandemic levels.
The sudden bearishness played out in Asian markets during the day and continued throughout the European session, although equities began to recover as the morning progressed.
Several Fed policymakers have said they may need to adopt monetary policy to help get the economy through the coronavirus pandemic.
“It’s easy to forget that we’ve just experienced one of the biggest and worst economic shocks on record,” said Kaspar Elmgreen, head of equities at Amundi.
“This story is not over yet, despite what the markets may indicate,” he said.
“We are navigating a ship here with unusually low forward visibility and a very wide range of outcomes.”
Spotgold rebounded last night and to the U.S. unemployed data on demand to the safe haven.
Spot gold prices were up 0.8% at $ 1,944.37 an ounce.
Graph: World Stocks and Oil vs COVID-19 here
Graph: Asset Performance 2020 here
Graph: World FX rates in 2020 here
Report by Alwyn Scott and Elizabeth Howcroft; Edited by Marguerita Choy and Steve Orlofsky
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