Stocks tiptoe higher as U.S. jobs boost offsets weak European data,
trade anxiety
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[October 07, 2019]
By Ritvik Carvalho
LONDON (Reuters) - Stocks edged up globally
on Monday as broadly positive U.S. jobs data from last week quelled some
fears about an economic slowdown, but nervousness over U.S.-China trade
talks persisted and more weak European economic data trickled in.
European shares gained despite falling German industrial orders data,
which underscored concerns about a looming recession in Europe's largest
economy. The pan-European STOXX 600 <.STOXX> was up 0.54% by midday in
London. [.EU]
Stocks worldwide took a battering last week, falling to their lowest in
more than a month on fears of a U.S. economic slowdown. But positive
U.S. jobs data on Friday helped spark a turnaround.
"I think the fact that the U.S. jobs report was broadly positive really
put the brakes on the fear factor that was circulating last week - that
the U.S. has been hit hard by the trade war," said David Madden, market
analyst at CMC Markets in London.
Asian stocks rallied in the slipstream of gains on Wall Street, with
MSCI's broadest index of Asia-Pacific Shares outside Japan rising 0.06%.
<.MIAPJ0000PUS>
Japan's Nikkei stock index <.N225> opened higher but reversed course and
declined 0.2%. A key Japanese economic index fell in August and the
government downgraded its outlook for the economy to "worsening,"
suggesting export-reliant Japan could slip into recession.
MSCI's All-Country World Index <.MIWD00000PUS>, which tracks shares
across 47 markets, moved into positive territory, up 0.1% after hovering
between flat and negative for most of morning trade.
Germany's DAX <.GDAXI> rose 0.5%, shrugging off data that showed
industrial orders fell slightly more than expected in August.
Morale among investors in the euro zone dropped in October to its lowest
in more than six years as stimulus measures taken by central banks
failed to allay recession fears, a survey by the Sentix research group
showed.
Besides the steady trickle of weak economic data, investors also had
their eyes on U.S.-China trade talks. Bloomberg reported that Chinese
officials are signaling they are increasingly reluctant to agree to a
broad trade deal pursued by U.S. President Donald Trump.
The report briefly lifted the safe-haven Japanese yen and gold.
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A trader works as a screen shows market data behind him at CMC
markets in London, Britain, December 11, 2018. REUTERS/Simon
Dawson/File Photo
An impeachment drive by U.S. Democrats arising from a
whistleblower's allegations that Trump leveraged $400 million in aid
to secure a promise from Ukraine's president to investigate Trumps's
political rival Joe Biden will continue this week. Several U.S.
diplomats will head to Capitol Hill for closed-door testimony.
On Sunday, lawyers said a second whistleblower had come forward to
substantiate the first complaint from an unnamed U.S. government
official, which touched off the investigation.
"I think it's fair to say the second whistleblower coming forward
will be an issue for Trump. This strengthens China's bargaining
position in the trade war," Madden said.
U.S. stock futures were 0.2% lower. <ESc1> <NQc1> [.N]
In currencies, the dollar was 0.1% higher against a basket of peers.
The euro was flat at $1.0983 <EUR=EBS>. Sterling was lower on
investors fears that Britain and the European Union are no closer to
agreeing a Brexit withdrawal deal. [GBP/]
Euro zone government bond yields fell slightly as investors weighed
signs of a resilient U.S. economy against concerns the U.S.-Sino
trade negotiations could fail.
There was some outperformance in Portugal's bond market following a
ratings upgrade on Friday and a weekend election.[GVD/EUR]
Yields in the biggest economies of the euro area were slightly
lower, with the German 10-year Bund yield falling 1.1 basis points
(bps) to -0.598% <DE10YT=RR>.
Oil prices rose. Brent crude futures were higher by 1% at $58.93 per
barrel, while West Texas Intermediate (WTI) crude futures were 1.2%
higher at $53.46. [O/R]
Spot gold <XAU=> fell 0.35% to $1,499.20 per ounce. [GOL/]
(Reporting by Ritvik Carvalho; Additional reporting by Stanley White
in Tokyo; Editing by Hugh Lawson and Steve Orlofsky)
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