Global stock rally flags after strong US data

Published: February 02, 2019 12:16:52 | Updated: February 05, 2019 14:40:37

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Global stocks edged up on Friday, while bond yields rose after US employment and manufacturing data underscored a strong economy with little wage inflation.

US job growth surged in January, with employers hiring the most workers in 11 months, the labour department said.

The employment report showed a tepid gain in hourly earnings while the ISM “prices paid” index slipped more than expected, the latest data that show a modest inflationary pace.

Prices in the US futures markets indicate traders see no rate hikes ahead, though short-term futures show they remain convinced the US central bank’s next move will be a rate cut rather than a hike.

Stocks pared early session gains on the economic data. MSCI’s gauge of stocks across the globe fell 0.09 per cent and emerging market stocks lost 0.05 per cent.

Earlier in Europe, the pan-European STOXX 600 index closed up 0.21 per cent. fell 5.3 per cent after its quarterly sales forecast fell short of Wall Street estimates and overshadowed record sales and profit during the holiday season.

The results weighed on the Nasdaq, while the S&P consumer discretionary index fell 1.91 per cent, the biggest losing sector on the S&P 500 index.

The Dow Jones Industrial Average rose 0.35 points, or 0 per cent, to 25,000.02. The S&P 500 lost 4.83 points, or 0.18 per cent, to 2,699.27.

The Nasdaq Composite dropped 34.31 points, or 0.47 per cent, to 7,247.42, reports Reuters.

Oil prices rose, lifted by signs the United States and China could soon settle their protracted trade dispute, while producer cuts and US sanctions on Venezuelan exports helped tighten supply.

International Brent crude oil futures settled up $1.91 to $62.75 per barrel. US West Texas Intermediate (WTI) futures rose $1.47 to settle at $55.26.

The dollar index fell 0.01 per cent, with the euro up 0.14 per cent to $1.146. The Japanese yen weakened 0.57 per cent versus the greenback at 109.52 per dollar.

US gold futures settled down 0.2 per cent to $1,322.10.

Benchmark 10-year US Treasury notes fell 15/32 in price to push their yield up to 2.6878 per cent.

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