© Reuters. FILE PHOTO: A man looks at an electrical panel showing the Nikkei Index outside a brokerage house in a business district in Tokyo, Japan June 21, 2021. REUTERS / Kim Kyung-Hoon
By Herbert Lash and Tommy Wilkes
NEW YORK / LONDON (Reuters) – Global stock markets faltered on Friday amid a weak US labor market report, and Treasury yields rose as investors still expect the Federal Reserve starts cutting back on massive bond purchases as early as next month.
Yields on the benchmark 10-year US Treasury bond surpassed 1.6% for the first time since June, the dollar eased and stocks on Wall Street fell as technology and other stocks high growth markets sold off while energy and financials advanced.
The US economy created the fewest jobs in nine months in September amid declining school hires and a labor shortage. Some have attributed this at least in part to jobs lost after the imposition of vaccine requirements to combat the surge of the Delta variant.
The unemployment rate fell to an 18-month low at 4.8%.
“The weakness in stocks hides an otherwise much stronger job market than what we are seeing now,” said Russell Price, chief economist at Ameriprise Financial (NYSE 🙂 Services Inc in Troy, Michigan. “It has to do with the immunization warrants for people who may have lost their jobs because of it.”
The MSCI All Country World Index slipped 0.05%, but rose 0.7% for the week.
In Europe, the large STOXX Europe 600 index closed 0.28% lower but recorded its best week in two months as fears of spike in inflation were tempered.
Gains in oil and banking stocks in Europe were offset by a 1.4% drop in tech stocks, as rising bond yields lessened the attractiveness of the high-growth sector, a story also seen on Wall Street.
The decline of 0.03%, the decline of 0.19% and the decline of 0.51%, fell after Wells fargo (NYSE 🙂 cut its price target on Comcast Corp (NASDAQ :), which fell 4.7%.
All three indices won for the week.
September’s jobs report was the last before Fed policymakers meet on November 2-3, when the market expects the reduction to begin or a timetable to be announced.
The Fed has made it clear that it doesn’t need a successful employment report to decline in November, said Kathy Lien, chief executive of BK Asset Management in New York.
“As you see a slight pullback in the dollar, I think the Fed remains on the right track,” she said.
The, which tracks the greenback against a basket of six currencies, fell 0.076% to 94.105.
The euro appreciated 0.19% to $ 1.1572, while the Japanese yen traded 0.56% to $ 112.2200.
The sideways market is due to an information vacuum ahead of the start of the third quarter earnings season next week, said Thomas Hayes, chairman and managing member of Great Hill Capital LLC.
“In recent weeks, there has been some uncertainty with Delta, so the market is really looking forward to the estimates,” said Hayes.
Global stock indices turned positive for the week after Thursday’s rally despite widespread selling initially due to surging energy prices and the prospect of an earlier-than-expected interest rate hike to combat inflation shook investors.
Global Equities https://fingfx.thomsonreuters.com/gfx/mkt/znpnezdojvl/world%20stocks.PNG
The US Senate’s approval of legislation to raise the federal government’s debt limit and avoid a historic default has boosted risk sentiment, though it did postpone the decision on a remedy longer term than in early December.
In Asia, the main benchmark was supported by advances in Chinese blue chips, which rose 1.31% as trading resumed after the National Day holiday week. Sentiment improved following a private sector survey that showed China’s service sector resumed growth in September.
Chinese stocks have been battered in the past three months by regulatory crackdowns, turmoil in the real estate sector over China Evergrande’s massive debt and recent power cuts. But some investors are starting to see a buying opportunity.
Oil prices rose, gaining more than 4% on the week, as a global energy crisis pushed prices to their highest level since 2014, as large global electricity users struggle to respond on demand.
rose 0.54% to $ 82.39 a barrel. was up 1.34% to $ 79.35 a barrel.
The United States fell 0.1% to $ 1,757.40 an ounce.