Global stocks dip on US jobs data
A REUTERS FILE IMAGE
Stocks edged back from record highs on Wednesday as Wall Street bumped up against underwhelming economic data, while oil continued to rise and the dollar weakened ahead of comments from the Federal Reserve.
Former Fed Chair Janet Yellen’s reported nomination to Treasury Secretary has emboldened those risk bets and further weighed on the dollar. “From here, the Fed will prove a mere auxiliary to maximise fiscal impact by ensuring cheap funding,” said John Hardy, head of FX strategy at Saxo Bank.
“The long-term implications of the Yellen nomination are distinctly dollar negative.” Minutes from the most recent Fed meeting are due later in the session.
On Wall Street, a surprise jump in weekly jobless claims added to signs the recovery in the labour market was stalling as the United States battled a new wave of Covid-19 infections. MSCI’s broadest gauge of world stocks was last trading down 0.12%, after renewed demand for shares earlier pushed it to a record high of 622.12. The rally in global stocks is set to continue for at least six months, a Reuters poll forecast on Wednesday.
But on Wednesday the Dow Jones Industrial Average fell 141.76 points, or 0.47%, to 29,904.48, the S&P 500 lost 11.17 points, or 0.31%, to 3,624.24 and the Nasdaq Composite added 3.45 points, or 0.03%, to 12,040.23.
“The question is, who wins the battle: the vaccines, or the rising cases in the short term?” said MAI Capital Management chief equity strategist Christopher C Grisanti. Optimism around vaccine developments and expectations of a recovery in corporate confidence and profitability should also push European stocks to near record highs next year, a separate Reuters survey found.
Published in The Express Tribune, November 26th, 2020.
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