Stocks tick up, oil off, with eyes on U.S. stimulus
Stocks edged up on Thursday on lingering bets over a stalled U.S. economic relief deal, while trade war angst and the coronavirus pandemic held back the bulls.
Tech shares powered higher on Wall Street while the euro edged up against the U.S. dollar.
Initial claims for U.S. state unemployment benefits dipped below 1 million for the first time since mid-March, but the expiration at the end of July of a $600 weekly jobless supplement likely contributed to the decline.
Data last week showed the economy regained only 9.3 million jobs of the 22 million lost between February and April, but Wall Street has recovered most equity market losses and the benchmark S&P 500 was within a few points of a record high.
“Our take on a new high, if it happens, is that it’s another reminder to investors how disconnected the stock market and the economy have been this year. The stocks have soared but economy – it’s improved, yes – but a million initial claims is still not good,” said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina.
The Dow Jones Industrial Average .DJI fell 43.24 points, or 0.15%, to 27,933.6, the S&P 500 .SPX gained 3.86 points, or 0.11%, to 3,384.21 and the Nasdaq Composite .IXIC added 105.31 points, or 0.96%, to 11,117.55.
The STOXX 600 suffered its first fall in five days after Washington said it would maintain 15% tariffs on planes and 25% tariffs on other European goods. [.EU]
The pan-European index lost 0.63% and MSCI’s gauge of stocks across the globe .MIWD00000PUS gained 0.16%.
The 5-month global rally has seen MSCI’s world index .MIWD00000PUS rise 50% from its March lows to stand within 2% of an all-time high.
In the currency and bond markets, faltering hopes for a compromise between Republicans and Democrats over additional stimulus for the U.S. economy dragged the dollar index =USD down. [/FRX]
The greenback =USD fell 0.179%, with the euro EUR= up 0.31% to $1.1819.
The Japanese yen strengthened 0.03% versus the dollar to 106.86 per dollar, while Sterling GBP= was last trading at $1.3082, up 0.38% on the day.
A selloff in benchmark government bond markets also eased, as investors digested the biggest ever 10-year U.S. debt sale, and some surprisingly robust U.S. inflation figures.
U.S. Treasury yields held near five-week highs on Thursday before the Treasury will sell a record amount of 30-year bonds, the final sale of $112 billion in new coupon-bearing supply this week.
Benchmark 10-year notes US10YT=RR last rose 1/32 in price to yield 0.6833%, from 0.686% late on Monday.
The 30-year bond US30YT=RR last fell 5/32 in price to yield 1.3712%, from 1.365%.
In Asia, Japanese stocks were the main mover, soaring 1.8% to a six-month peak .N225 on gains from chip firms. [.T]
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.07% higher, while Japan’s Nikkei futures NKc1 rose 0.22%. Emerging market stocks rose 0.35%.
Oil prices eased after the International Energy Agency lowered its 2020 oil demand forecast following unprecedented travel restrictions, but resilience in equities markets and a weak dollar limited losses. Traders kept an eye on U.S. stimulus headlines.
“Overall, neither yesterday’s OPEC or today’s IEA release appeared to have much effect on an oil market that is still primarily focused on the ongoing expansion in risk appetite that remains undeterred by lack of progress in formulating a viable U.S. stimulus deal,” said Jim Ritterbusch of Ritterbusch and Associates.
U.S. crude CLc1 recently fell 0.91% to $42.28 per barrel and Brent LCOc1 was at $45.02, down 0.9% on the day.
Spot gold XAU= added 1.6% to $1,947.84 an ounce. Silver XAG= gained 4.85% to $26.80.