Global stocks mixed as US-China tensions rise, Washington deal elusive

The Wall Street sign is pictured at the New York Stock exchange (NYSE) in the Manhattan borough of New York City, New York, US, March 9, 2020. ― Reuters pic
The Wall Street sign is pictured at the New York Stock exchange (NYSE) in the Manhattan borough of New York City, New York, US, March 9, 2020. ― Reuters pic

NEW YORK, Aug 8 — Wall Street stocks finished mixed yesterday, with the Nasdaq retreating from records, following data showing the US economy adding jobs as US-Chinese tensions mount and a standoff over fresh stimulus continues.

The monthly US non-farm payrolls market report had been eagerly awaited as the first important indication of how a recent surge in infections that has sparked a second round of business closures has affected the economy.

The report showed that the US economy added 1.8 million jobs in July, far fewer than in May and June, but more than economists had been expecting.

Meanwhile the unemployment rate fell to 10.2 per cent from 11.1 per cent, also better than consensus expectations. 

However that still leaves the unemployment rate at slightly worse than the depth of the global financial crisis in October 2009 and fewer than half of the 22 million payroll jobs lost during the pandemic have been regained.

The employment report “can fairly be labeled better than feared,” said analyst Patrick J. O’Hare. 

“The key takeaway from the report is that the labor market is recovering from the shock of the Covid-induced seizure, but still has a long way to go,” he added.

Other analysts put a more negative spin on the report.

“The non-farm payroll report confirmed economic data is plateauing and that the third quarter rebound everyone expected is not happening,” said Edward Moya at online currency trading firm Oanda.

The US jobs data boosted the dollar, but equity indices were mixed with the Dow and S&P 500 edging higher and the Nasdaq retreating from a streak of four straight records.

European stocks rose, while Asian bourses fell.

Flare-up in US-China tensions

Investors were also monitoring escalating friction between Washington and Beijing. Yesterday, the United States slapped sanctions on Hong Kong’s top leader in the wake of a new Chinese security law imposed on the city.

The move came after Trump Thursday night announced sweeping restrictions against Chinese-owned social media giants TikTok and WeChat, drawing a rebuke from Beijing, which slammed the move as “arbitrary political manipulation and suppression.”

The actions add to a laundry list of issues that Washington and Beijing they have butted heads over in recent months, including Huawei, trade policy and the coronavirus.

Shares in WeChat parent Tencent sank 10 per cent at one point in Hong Kong before ending down almost 6 per cent. 

“The US government is expected to follow up with more measures targeting Tencent,” said Steven Leung, at UOB Kay Hian.

The mood on Wall Street has also been soured by US lawmakers’ slow negotiations on new economic stimulus against a backdrop of surging virus infections.

The latest talks between Democratic congressional leaders and Trump administration officials again ended with finger-pointing. 

“Another fiscal package is urgently needed, but alarmingly, policymakers may be at an impasse,” said a note from Oxford Economics. “Failure to reach an agreement adds downside risk to an economy that is already at a critical juncture.”

Key figures around 2050 GMT

New York - Dow: UP 0.2 per cent at 27,433.48 (close)

New York - S&P 500: UP 0.1 per cent at 3,351.28 (close)

New York - Nasdaq: DOWN 0.9 per cent at 11,010.39 (close)

London - FTSE 100: UP less than 0.1 per cent at 6,032.18 (close)

Frankfurt - DAX 30: UP 0.7 per cent at 12,674.88 (close)

Paris - CAC 40: UP less than 0.1 per cent at 4,889.52 (close)

EURO STOXX 50: UP 0.4 per cent at 3,252.65 (close)

Tokyo - Nikkei 225: DOWN 0.4 per cent at 22,329.94 (close)

Hong Kong - Hang Seng: DOWN 1.6 per cent at 24,531.62 (close)

Shanghai - Composite: DOWN 1.0 per cent at 3,354.04 (close)

Euro/dollar: DOWN at US$1.1786 from US$1.1877 at 2100 GMT 

Dollar/yen: UP at ¥105.94 from ¥105.55

Pound/dollar: DOWN at US$1.3057 from US$1.3143

Euro/pound: DOWN at 90.24 pence from 90.37 pence

West Texas Intermediate: DOWN 1.7 per cent at US$41.22 per barrel 

Brent North Sea crude: DOWN 1.5 per cent at US$44.40 a barrel — AFP

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