NEW YORK, July 3 ― A measure of stocks across the globe rose for a fourth straight day yesterday after June US payrolls grew by a record 4.8 million, but investors also flocked to the safe-haven dollar and US Treasuries on concerns about surging Covid-19 cases in many US states.
Several states, along with some other parts of the world, are reversing or pausing reopenings to tackle a recent surge in infections, leaving analysts worried about another sell-off in financial markets if the damage mounts.
June's job survey, which saw the unemployment rate fall to near 11 per cent and average wages drop 1.2 per cent, was taken just as the spike in Covid-19 cases started to accelerate. Over 31 million Americans were still collecting unemployment checks weekly.
“The strong rebound would normally be an unambiguously positive sign that a recovery is under way, (but) it is being accompanied by a sharp rise in new infections, which was what caused the collapse in the first place,” said Mike Bell, global market strategist at JP Morgan Asset Management in London.
“It is therefore too soon to say for certain that this recovery in employment sounds the all-clear for investors.”
The Dow Jones Industrial Average rose 92.39 points, or 0.36 per cent, to 25,827.36, the S&P 500 gained 14.15 points, or 0.45 per cent, to 3,130.01 and the Nasdaq Composite added 53.00 points, or 0.52 per cent, to 10,207.63.
The pan-European STOXX 600 index rose 1.97 per cent and MSCI's gauge of stocks across the globe gained 0.92 per cent. Emerging market stocks rose 2.24 per cent.
Japan's Nikkei futures rose 0.52 per cent and overnight, MSCI's broadest index of Asia-Pacific shares outside Japan closed 2.29 per cent higher.
US financial markets will be closed today in observance of tomorrow's Independence Day holiday.
Yesterday, oil futures prices were lifted by the US employment numbers but gains were limited as the spike in US coronavirus infections fanned concerns that economic activity would weaken in coming weeks.
US crude rose 1.26 per cent to US$40.32 (RM172.83) per barrel and Brent was at US$42.79, up 1.81 per cent on the day.
Treasury yields initially rose after the strong jobs numbers, but backtracked and traded lower for most of the session.
Benchmark 10-year notes last rose 4/32 in price to yield 0.6693 per cent, from 0.682 per cent late on Wednesday.
The 30-year bond last rose 4/32 in price to yield 1.4292 per cent, from 1.434 per cent.
“The knee-jerk move in the wake of the jobs report made sense,” said Ben Jeffery, a strategist at BMO Capital Markets in New York. “But clearly people were reluctant to sort of push that sell-off just given the headline risk over the weekend and the fact that things on the virus front still seem to be worsening.”
The dollar edged higher after initially softening on the payroll numbers. The dollar index rose 0.065 per cent, with the euro down 0.11 per cent to US$1.1238.
“Dollar performance will hinge on the US response to Covid,” said Juan Perez, senior currency trader at Tempus Inc in Washington. “On that end, the US is losing because the situation is far more difficult than in other parts of the world.”
The Japanese yen weakened 0.02 per cent versus the greenback to 107.52 per dollar, while sterling was last trading at US$1.2464, down 0.05 per cent on the day. ― Reuters
