The Financial Express

World stocks fall after strong jobs report dampens hope of a Fed rate cut

Published: July 06, 2019 11:51:12 | Updated: July 11, 2019 10:50:06

File Photo (Collected) File Photo (Collected)

Global stocks were lower on Friday after strong US jobs report and weak economic data in Germany.

The US jobs report that tempered expectations of an aggressive interest rate cut by the Federal Reserve later this month and the weak economic data in Germany helped push the markets indices lower. 

Yields on benchmark 10-year Treasury notes rose back above 2.0 per cent after hitting their lowest since November 2016 on Wednesday.

Nonfarm payrolls increased by 224,000 last month as government employment rose by the most in 10 months, the US Labor Department reported.

The better-than-expected showing reduced the likelihood the Fed will cut interest rates at its next meeting later this month.

Expectations of an equity-friendly rate cut helped push the S&P 500 to record highs earlier this week.

MSCI’s gauge of stocks across the globe shed 0.56 per cent, reports Reuters.

On Wall Street, the Dow Jones Industrial Average fell 57.29 points, or 0.21 per cent, to 26,908.71, the S&P 500 lost 10.91 points, or 0.36 per cent, to 2,984.91.

The Nasdaq Composite dropped 30.23 points, or 0.37 per cent, to 8,140.00.

Market volume in the US was light due to the holiday-shortened week.

The losses in the US market followed broad dips in European equities after German data showed industrial orders had fallen far more than expected in May.

The pan-European STOXX 600 index lost 0.72 per cent.

Benchmark 10-year notes last traded 24/32 lower in price to yield 2.0373 per cent, from 1.955 per cent late on Wednesday.

The dollar index rose 0.57 per cent, with the euro down 0.58 per cent to $1.1219.

Brent crude futures, the international benchmark for oil prices, gained 1.5 per cent to $64.26 per barrel while US crude rose 0.4 per cent to $57.58.

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