Global stock markets consolidated recent gains yesterday, comforted by an easing of geopolitical tensions and a looming US-China trade deal which allowed investors to shrug off mild disappointment sparked by a weaker-than-expected American jobs report.
London’s FTSE 100 closed 0.1% down at 7,587.85 points, Frankfurt’s DAX 30 ended 0.1% lower at 13,483.31 points and Paris’ CAC 40 finished with a 0.1% drop at 6,037.11 points. The pan-European STOXX 600 index rose 0.04% and Germany’s DAX rose 0.15%.
The US economy generated 145,000 new jobs in December, around 20,000 short of consensus forecasts, a relatively minor miss.
The slowdown sparked some talk of an easier Fed policy, but overall the figures were seen as confirmation that the US economy is still solid.
The dollar, however, lost ground against its peers in reaction.
“Stocks were unperturbed as the slightly softer than expected jobs data and weaker wage data confirmed the Fed’s stance that the economy is still ‘in a good place’ and that we will likely continue to see a low interest rate environment in 2020,” said Edward Moya at Oanda.
On Wall Street, where stocks had jumped to new records Thursday, the DJIA index was a touch lower in the late morning after opening unchanged.
“The continued fading of recently ramped-up geopolitical concerns and expectations of a signed US-China ‘phase one’ trade deal next week are appearing to help counter a softer-than-expected December non-farm payroll report,” said analysts at Charles Schwab.
“The economy continues to grow and there’s an absence of inflation pressure, and that’s positive for stocks and bonds,” said Joseph LaVorgna, chief economist for the Americas at French bank Natixis in New York.
“There was no way this type of report was going to get the market nervous about recession risks or inflation.
It’s a win for both the stock and bond market.”
MSCI’s gauge of stocks across the globe gained 0.28% to a record, while the three main indexes on Wall Street also set fresh highs for the second day in a row.
On Wall Street, the Dow Jones Industrial Average crossed the 29,000 mark for the first time, helped by gains in technology and healthcare stocks.
Technology shares, the market leader of the past decade, were poised for the sharpest gains this week among the 11 main S&P sectors.
Investors welcomed news that sales of Apple’s iPhones in China in December jumped more than 18% on the year.
The Dow rose 13.19 points, or 0.05%, to 28,970.09.
The S&P 500 gained 6.55 points, or 0.20%, to 3,281.25 and the Nasdaq Composite added 29.88 points, or 0.32%, to 9,233.31.
European shares also rose, without hitting new records.
Earlier, most Asian stock markets closed higher but investors struggled to maintain a rally triggered by easing US-Iran tensions the previous day.
The toning down of rhetoric from US President Donald Trump and Tehran following an Iranian missile attack on US assets in Iraq soothed concerns about a possible conflict in the Middle East and lit a fire under global equities on Thursday.
That allowed dealers to resume a buying spree that had characterised business for the past few weeks, cheered by China and the United States reaching a trade deal, central banks easing monetary policy and data pointing to an improved global outlook.
Looking ahead to next week, China and the US put pen to paper on their mini trade deal.
Oil prices were mixed, with the sharp gains enjoyed in the wake of the US assassination of Iran’s top general being wiped out by easing tensions.
The commodity is now below levels seen before the killing.
There appeared to be little market reaction to claims by Canada that Iran shot down an airliner in Tehran this week, killing 176 people.
Brent oil futures fell below $65 a barrel as Middle East tensions eased and investors focused on rising US crude inventories and other signs of ample supply.
Brent crude, the global benchmark, slid 42 cents to $64.95 a barrel, and was heading for its first weekly decline in six weeks.
West Texas Intermediate crude slipped 44 cents to $59.12.
Spot gold added 0.4% to $1,558.98 an ounce.