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Yields rise, stocks waver after U.S. jobs data

Stock MarketsOct 08, 2021 04:50PM ET
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2/2 © Reuters. FILE PHOTO: A man watches an electric board showing Nikkei index outside a brokerage at a business district in Tokyo, Japan, June 21, 2021. REUTERS/Kim Kyung-Hoon 2/2

By Herbert Lash and Tommy Wilkes

NEW YORK/LONDON (Reuters) - Global equity markets wavered on Friday on a weak U.S. labor market report, and Treasury yields rose as investors still expect the Federal Reserve to begin tapering its massive bond purchases as early as next month.

Yields on the benchmark 10-year U.S. Treasury note climbed above 1.6% for the first time since June, the dollar eased and stocks on Wall Street slid as technology and other high-growth shares sold off while energy and financials gained.

The U.S. economy created the fewest jobs in nine months in September amid a drop in hiring at schools and worker shortages. Some attributed that at least partly to jobs lost after vaccine requirements were imposed to combat the surge of the Delta variant.

The unemployment rate dropped to an 18-month low of 4.8%.

"The headline weakness hides an otherwise much stronger job market than we're currently seeing," said Russell Price, chief economist at Ameriprise Financial (NYSE:AMP) Services Inc in Troy, Michigan. "It's related to mandates for vaccinations for the people who may have lost their jobs because of that."

MSCI's all-country world index slid 0.05%, but rose 0.7% for the week.

In Europe the broad STOXX Europe 600 index closed down 0.28% stocks yet marked its best week in two months as fears of soaring inflation were tempered.

Gains in oil and bank stocks in Europe were outweighed by a 1.4% decline in tech stocks as rising bond yields dimmed the high-growth sector's appeal, a story seen on Wall Street too.

The Dow Jones Industrial Average slipped 0.03%, the S&P 500 slid 0.19% and the Nasdaq Composite fell 0.51%, pulled lower after Wells Fargo (NYSE:WFC) cut its price target on Comcast Corp (NASDAQ:CMCSA), which tumbled 4.7%.

All three indexes gained for the week.

The September jobs report was the last one before Fed policymakers meet Nov. 2-3, when the market expects tapering to begin or a timeline to be announced.

The Fed has made it clear that it does not need a blockbuster jobs report to taper in November, said Kathy Lien, a managing director at BK Asset Management in New York.

"While you're seeing a little bit of a pullback in the dollar, I think the Fed remains on track," she said.

The dollar index, which tracks the greenback versus a basket of six currencies, fell 0.076% to 94.105.

The euro was up 0.19% at $1.1572, while the Japanese yen traded up 0.56% at $112.2200.

The sideways market is due to an information vacuum before the third-quarter earnings season starts next week, said Thomas Hayes, chairman and managing member of Great Hill Capital LLC.

"The last few weeks there's some uncertainty with Delta, so the market is really looking forward to estimates," Hayes said.

Global stock indexes turned positive for the week after Thursday's rally despite widespread selling initially as soaring energy prices and the prospect of sooner-than-expected interest rate hikes to combat inflation rattled investors.

World stocks https://fingfx.thomsonreuters.com/gfx/mkt/znpnezdojvl/world%20stocks.PNG

The U.S. Senate's approval of legislation to raise the federal government's debt limit and avoid a historic default buoyed risk sentiment, though it only put off a decision on a longer-term remedy until early December.

In Asia, the main share benchmark was supported by advances in Chinese blue chips, which rose 1.31% as trading resumed after the week-long National Day holiday. Sentiment improved from a private-sector survey that showed China's services sector returned to growth in September.

Chinese shares have been battered the past three months by regulatory clamp-downs, turmoil in the property sector related to China Evergrande's vast debt, and recent power shortages. But some investors are starting to see a buying opportunity.

Oil prices rose, gaining more than 4% on the week, as a global energy crunch lifted prices to their highest since 2014 as big global power users struggle to meet demand.

Brent crude rose 0.54% to settle at $82.39 a barrel. U.S. crude settled up 1.34% at $79.35 a barrel.

U.S. gold futures settled down 0.1% at $1,757.40 an ounce.

Yields rise, stocks waver after U.S. jobs data
 

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Comments (8)
Toby Fiddler
Toby Fiddler Oct 08, 2021 5:44PM ET
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Mitchel Pioneer, shut up
me ish
me ish Oct 08, 2021 8:24AM ET
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"There is so much liquidity out there and there is no alternative to stocks so each time there is a pullback, buy-the- dip kicks in." - folk aren't forced to spend cash - one could just hold it and await the massive inevitable collapse of the markets - at which point gold and silver will do just fine! There are alternatives - no alternative is a false narrative to encourage the greater fool theory. When this market starts to tank properly, I'll be shorting the market - there's an alternative!
jason xx
jason xx Oct 08, 2021 6:09AM ET
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who what WHEN where why! No one is listing the time nfp comes out
Selfmade DC
Selfmade DC Oct 08, 2021 6:09AM ET
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I think it’s usually around 8:30am
Darrell Peterson
Darrell Peterson Oct 08, 2021 1:26AM ET
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JP Morgan Devil says Evergrande has at least a additional 55% more debt off the books , this keeps getting better lmao .
David David
David9 Oct 08, 2021 1:26AM ET
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JP don't know... the truth is off the books they have a lot of cash stacked away... they don't want to take out out yet...
Fong SH
Fong SH Oct 08, 2021 1:26AM ET
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Wall Street going up another 40% ? More like a correction or a pull back of 15 to 20% for mor e. Just a reminder - Wall Street excuse for sell-off - Black Monday October 19, 1987, it has been a event for years, although it happened years back, but Fund Managers, Traders always like to use this as a 'tool' to do a sell-off to reposition their portfolio. Man-on-street - be careful. Trade with cautious.
Selfmade DC
Selfmade DC Oct 08, 2021 1:26AM ET
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Sell off stocks etc and put into bitcoin as a hedge
me ish
me ish Oct 08, 2021 1:26AM ET
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yeah, shorting from here with long stops should do just fine. markets will edge up before a new leg down
Rodney Dangerfield
Rodney Dangerfield Oct 08, 2021 1:26AM ET
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if you listen to either one of these people you're screwed
David David
David9 Oct 08, 2021 12:55AM ET
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China is the best place to invest right now. That will be where money will flow.
Fong SH
Fong SH Oct 07, 2021 11:19PM ET
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Oh now Hang Seng is good ? China is good ? Thought there was so many negative news about Hang Seng and China markets ? Wow, mind changes so fast, oh I forgot we are in the supersonic internet era lol Well, I guess that's how investments is all about in the 21st centuries lol
Edward Chong
Edward Chong Oct 07, 2021 11:19PM ET
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hsi is trapping shortist last week.
Fong SH
Fong SH Oct 07, 2021 11:19PM ET
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Edward Chong  Understand, well, in the 21st century, it's politics mixed with investments lol Been trading since 1983 till now, seen lots of these yoyo, but in the 21st century era, it's investments mixed with politics lol Take care, stay safe and healthy when outdoors, wear a mask. Cheers
Kojo Isaac
Kojo Isaac Oct 07, 2021 10:33PM ET
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good
 
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