Friday, 19 Aug, 2022

Global stocks edge up after a hiring slowdown in the US calms taper fears, while oil drops after OPEC+ sticks with its supply plans

Spencer Platt/Getty ImagesGlobal stocks rose Thursday as soft US data calmed tapering fears ahead of a key jobs report. Oil fell after OPEC+ stuck..

  • Global stocks rose Thursday as soft US data calmed tapering fears ahead of a key jobs report.
  • Oil fell after OPEC+ stuck with its plan to boost output by 400,000 barrels per day.
  • Chinese tech stocks led gains in Asian equities after Beijing boosted stimulus measures for firms hit by the pandemic.
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Global stocks rose on Thursday after data showed a hiring slowdown in the US that fueled expectations for the Federal Reserve to keep existing stimulus measures in place and delay a tapering of its asset purchases.

Futures on the Dow Jones, S&P 500, Nasdaq were up about 0.2% as of 4:20 a.m. ET, suggesting a higher start to trading for all three major indices later in the day.

US private payrolls rose by 374,000 in August, falling short of the 613,000 estimate from economists surveyed by Bloomberg, but above July's gain of 326,000. Traders are now awaiting the broader non-farm payrolls report on Friday, which is expected to show an increase of 750,000 for August.

Tapering fears have receded, and soft US data has taken the heat out of expectations for non-farm payroll data and further reinforced Fed Chairman Powell's cautious approach in investors' minds, said Jeffrey Halley, senior market analyst at OANDA.

The Institute for Supply Management's index of manufacturing activity for August unexpectedly rose from 59.5 to 59.9 on Wednesday, compared to an expected 58.5, but the employment component showed a contraction, which Deutsche Bank strategists said did not bode well for Friday's jobs number.

Data highlights from the US for Thursday include data for July on industrial production, factory orders and trade, along with weekly initial jobless claims.

Oil prices fell after OPEC+ stuck to an agreement to gradually return crude supply to the market, defying calls from the US government for a larger increase in production to rein in soaring gasoline prices after Hurricane Ida shuttered output facilities across the Gulf of Mexico.

The exporter group took less than 30 minutes to agree to add no more than 400,000 barrels per day to their joint crude output a month.

Brent crude futures hit an intraday low of $71.30 a barrel and West Texas Intermediate traded as much as 0.4% lower at $67 a barrel.

Overnight in Asia, Chinese tech stocks led gains after Beijing boosted stimulus measures by announcing a provision of 300 billion yuan ($46.4 billion) to firms hit hard by the pandemic. The bank also announced other measures like interest subsidies to small- and medium-sized companies.

As part of an ongoing crackdown, Chinese regulators summoned 11 ride-hailing firms to discuss points of concern within the sector. But this hasn't yet had much of an impact on markets.

Bank of Japan board member Goushi Kataoka said the country isn't recovering fast enough and the central bank would ease further without hesitation by ramping up bond-buying, if needed.

The Shanghai Composite rose 0.8%, Tokyo's Nikkei rose 0.3%, and Hong Kong's Hang Seng rose 0.1%.

In Europe, bond markets are reacting to signs that investors expect the European Central Bank to reduce its pandemic emergency programs. An August reading shows inflation in the eurozone is at a decade-high, and investors will closely watch the ECB's meeting next week where members are expected to discuss the future of its asset purchases.

German 10-year Bund yields are still deeply in negative territory, at around -0.386%, but they have risen to their highest in around six weeks in the past few days, reflecting some of the investor nervousness around the outlook for eurozone inflation.

London's FTSE 100 rose 0.09%, the Euro Stoxx 50 rose 0.2%, and Frankfurt's DAX rose 0.2%.

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Read the original article on Business Insider

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