Big tech shares edged higher by helping a benchmark world stock index post. This is a sixth consecutive closing high, after a weak U.S. jobs report. Labor Department data that showed wages increasing more than expected in August. This in turn had raised inflation fears, leading longer-dated Treasury yields to jump.
MSCI’s all-country world index, notched a new record. Meanwhile, Apple Inc, Amazon.com Inc, Google parent Alphabet Inc and Facebook Inc advanced. The tech gains also helped the Nasdaq set a fresh closing high. The Dow Industrials and S&P 500 fell as slower U.S. jobs growth raised questions, which were all about the pace of the recovery. Lee Ferridge, North American head of multi-asset strategy at State Street Global Markets stated that the Fed taper announcement is off the table in September. And also added that the support from the Fed for these markets is going to persist. And the Taper starts later rather than sooner, which is a positive for equities. As long as the Fed is printing, it means that the equity markets are supported by the QE liquidity arguments.
In seven months, US employers has created more jobs, as the Delta variant hurt the leisure and hospitality sector. But still the job reports showed that a 0.6% increase in wages underlies the strength in the economy. Nonfarm payrolls increased by 235,000 in August. But also, the unemployment rate fell to 5.2% from 5.4% in July. Euro zone business activity, was stronger last month. This suggests that the bloc’s economy could be back to pre-COVID-19 levels, by this year-end.
Yields on the benchmark 10-year Treasury note rose 3 basis points to 1.324%. The dollar index dropped to a low of 91.941. And the euro traded flat at 1.1875, the yen slid 0.19% to 109.72. Japanese shares jumped after officials said Prime Minister Yoshihide Suga would step down. Japan’s TOPIX stock index rose to a 30-year high. Meanwhile, Chinese blue chips were down 0.5% and Hong Kong was off 0.72%. Oil prices slipped on the U.S. labor report. Brent crude futures fell 42 cents, on the other hand the U.S. crude slid 70 cents to settle at $69.29 a barrel. Gold has advanced more than 1% to its highest in 2-1/2 months. U.S. gold futures settled 1.2% higher.