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Stock markets remain on cautious recovery course thanks to hopeful US labour market data

On equity markets in Europe, the US and today also in Asia, the latest jobs data from the US gave investors a little more optimism. This was particularly noticeable on the Nasdaq, where tech stocks were able to recover some of their recent losses. In Asia, the stock markets initially followed the gains from overseas, but were only able to partially carry the recovery into the weekend. The recovery remains highly fragile and new impetus will be needed to support them. The latest inflation data from the US is therefore eagerly awaited next week. 

Data
Autore
Alessandro Fezzi, LGT Research Content & Publications
Tempo di lettura
5 minuto

US Jobless Claims
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The Dow Jones Industrial rose nearly 1.8% to 39,446.49 points on Thursday, driven by hopeful figures from the US labour market, which have eased fears of a downturn in the US economy somewhat. The shares of pharmaceutical company Eli Lilly, for example, gained around 14% at times thanks to a good quarterly report and outlook. The broad S&P 500 ended trading at 5,319.31 points, 2.3% higher than the previous day, and the indices on the Nasdaq gained around 3%. Among the winners were stocks such as Nvidia, Apple and Microsoft, whose shares gained up to 6% yesterday. On the bond market, the yield on ten-year US government bonds climbed again to just under 4%.

Latest US labour market data gives hope again

The weekly reported initial jobless claims in the US have fallen more sharply than expected, which is a positive sign for developments on the labour market. The number of applications fell to 233,000, which was 17,000 fewer than a week earlier, as reported by the Department of Labour in Washington. Analysts had expected 240,000 applications. The weekly initial claims are considered a timely indicator for the US jobs market. After the last monthly labour market statistics was significantly worse than expected fears of a recession in the world's largest economy intensified and put pressure on the stock markets.

Asia's stock markets can only partially salvage recovery into the weekend

The Asia-Pacific markets initially traded higher on Friday, following the price gains on Wall Street, although some stock exchanges were unable to hold on to their gains. In Tokyo, the Nikkei 225 and the broad-based Topix gained around 1.1% during the trading day but were slightly down again at the close of trading. The 7.1-magnitude earthquake in south-west Japan is likely to cause concern, as the risk of an even bigger quake cannot be ruled out. The South Korean Kospi rose by 1.3% at times, while the small-cap Kosdaq index gained almost 3% in places. The S&P/ASX 200 in Sydney traded around 1% higher. The Hang Seng Index in Hong Kong rose by 1.4%. The CSI 300, which represents mainland China, remained more or less unchanged. In the People's Republic, consumer prices rose by 0.5% in July compared to the same period last year. This means that inflationary pressure has manifested itself somewhat more strongly than expected. The consensus had assumed a price increase of 0.3%. However, the inflation also gives hope that the weak consumer demand could recover.

Dax benefits from solid corporate results

In Frankfurt, the Dax was able to recoup most of the losses from early trading on Thursday and closed around 0.4% higher. On the one hand, the good data from the US labor market, and on the other hand, positive corporate news provided relief for investors. Allianz shares gained 1.9% after the insurer increased its profit in the second quarter and announced an expansion of its share buyback programme. At Deutsche Telekom, surprisingly high demand for mobile phone contracts led to a strong quarter. The shares rose by just under 2%. Siemens shares fluctuated strongly and closed 2.1% higher. The technology group continues to benefit from good business with intelligent infrastructure.

Corporate and macroeconomic calendars

Corporate news in focus: Quarterly figures from Alibaba.

Economic data in focus: German and Italian Consumer Price Index, Canadian unemployment rate.

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.

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