Stock markets pushed higher yesterday after data showed the US economy continuing to add jobs at a steady clip despite turbulence from a trade war with China.
A better-than-expected 128,000 net new jobs in October showed demand for workers remained resilient despite President Donald Trump’s protracted trade war with China that has chilled investment and slowed the economy.
Gains in the prior months were revised up sharply, the jobs market absorbed the impact of a General Motors strike and wages continued to climb, all combining to paint a positive jobs picture.
“The key takeaway from the report is that it is not emblematic of an economy that is on the brink of a recession,” analyst Patrick O’Hare wrote at Briefing.com.
“On the contrary, it is emblematic of an economy that is expanding.”
The main indices on Wall Street rose robustly in the wake of the jobs data, helping European markets extend modest early gains.
“This barnstorming set of jobs numbers has jolted the dollar and US equities into life,” said Samuel Fuller, director of Financial Markets Online.
“Coming so soon after (US Federal Reserve chief) Jerome Powell hinted that the Fed is to pause its interest rate cuts, the confirmation that America’s job-creation engine is still running smoothly means any further rate cuts could now be months away.”
The jobs figures helped divert attention away from gloom over China-US trade talks.
Investors had been spooked by a speech by Secretary of State Mike Pompeo, in which he called China “truly hostile” to the United States, leading Beijing to accuse the White House of “viciously” attacking it.
The flare-up came just as the two sides are putting the finishing touches to a mini trade pact that is seen as the first phase of a wider agreement, with top-level phone talks due to take place.
On Thursday, the mood on Wall Street went sour when Bloomberg News reported that Chinese officials were sceptical they would be able to reach a comprehensive long-term deal.
But in Asia yesterday, after an early sell-off, traders took the developments in their stride and the mood picked up through the day to give the region’s equity markets a healthy end to the week.
Shanghai jumped 1% after a private gauge of Chinese manufacturing activity showed an improvement, soothing worries about Thursday’s official reading that pointed to further contraction in the sector.
A decision by a World Trade Organisation arbitrator to authorise China to slap tariffs on US imports worth up to $3.58bn annually in a years-long dispute added to the perception that all is not well on the trade front.
In London, the FTSE 100 closed up 0.8% to 7,302.42 points; Frankfurt — DAX 30 ended up 0.7% to 12,961.05 points and Paris — CAC 40 closed up 0.6% to 5,761.89 points yesterday.
from Gulf Times https://ift.tt/34jDaJh
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