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Stocks, yields slide after U.S. jobs report as Omicron looms

Stock Markets Dec 03, 2021 05:31PM ET
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2/2 © Reuters. FILE PHOTO: Passersby wearing protective face masks walk past an electronic board displaying world stock indexes, amid the coronavirus disease (COVID-19) pandemic, in Tokyo, Japan November 1, 2021. REUTERS/Issei Kato 2/2
 
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By Herbert Lash and Lewis Krauskopf

NEW YORK (Reuters) -Global equities and benchmark U.S. bond yields tumbled on Friday in volatile trade after data showed U.S. job growth slowed considerably in November and the Omicron variant of the coronavirus kept investors on edge.

Nonfarm payrolls increased by 210,000 jobs, the fewest since last December, but the unemployment rate plunged to a 21-month low of 4.2% and 594,000 people entered the labor force, the most in 13 months, indicating a rapidly tightening labor market.

Despite weak jobs growth, solid details in the Labor Department report suggested Federal Reserve plans to accelerate tapering of its bond purchases and expectations for multiple rate hikes next year remained intact.

The yield on 10-year U.S. Treasury notes fell 9.8 basis points to 1.351% and the tech-heavy Nasdaq Composite stock index slid almost 3% at one point as investors anticipated slower economic growth next year.

"The market is saying the Fed is going to make a serious policy error by raising rates too quickly," said Joe LaVorgna, chief economist for the Americas at Natixis. "Everything is working toward a much weaker growth backdrop; that is what the market senses, and the virus is occurring in the backdrop."

The Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, narrowed to 77.0 basis points, down from almost 130 points in early October.

Recent global economic growth projections from the International Monetary Fund are likely be downgraded due to the emergence of the Omicron variant, said IMF Managing Director Kristalina Georgieva.

Omicron has gained a foothold in many countries worldwide and many governments have restricted travel rules to curb the variant.

"The top issue is still this whole Omicron variant. There are enormous amounts of uncertainty there," said Randy Frederick, vice president of trading and derivatives for Charles Schwab (NYSE:SCHW) in Austin, Texas.

Oil prices fell and gold prices rose almost 1% as the plunge in U.S. Treasury yields boosted the safe-haven metal's appeal.

MSCI's all-country world index fell 0.81% and the broad STOXX Europe 600 index closed down 0.6%.

Stocks on Wall Street pared heavy, earlier losses. The Dow Jones Industrial Average closed down 0.17%, the S&P 500 fell 0.84% and the Nasdaq Composite lost 1.92%.

The safe-haven Japanese yen and Swiss franc gained as market sentiment soured.

The dollar index, which tracks the greenback versus a basket of six currencies, rose 0.07% to 96.161.

The euro gained 0.06% to $1.1306, while the yen fell 0.36% to $112.7400.

Crude prices ended little changed after erasing gains of more than $2 a barrel on growing worries that rising coronavirus cases could reduce global oil demand.

Crude prices edged higher after producer group OPEC+ said it could review its policy to hike output at short notice if a rising number of pandemic lockdowns chokes off demand.

Brent futures rose 21 cents to settle at $69.88 a barrel, while U.S. West Texas Intermediate (WTI) crude ended 24 cents lower at $66.26 a barrel.

U.S. gold futures settled 1.2% higher at $1,783.90 an ounce.

Bitcoin fell 5.00% at $53,720.0400.

Stocks, yields slide after U.S. jobs report as Omicron looms
 

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Comments (7)
Robert Palumbo
Robert Palumbo Dec 03, 2021 4:23PM ET
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Stop with the Omicron news already . It's the mildest version yet.
Andrew Ho
Andrew Ho Dec 03, 2021 3:20PM ET
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market just see any news as bad news
Glenn Ebersole
Glenn Ebersole Dec 03, 2021 11:22AM ET
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Buy the dip until no more dippers?
Darrell Peterson
Darrell Peterson Dec 03, 2021 1:59AM ET
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this is all a mute point, Fed will back track for reasons that require even more quantitative easing in the next couple of months, use your imagination for a reason why , there are plenty.
ZM Qi
ZM Qi Dec 03, 2021 12:00AM ET
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In short, Don't buy ADR Chinese stocks for ever
Erski Gumby
SB20 Dec 03, 2021 12:00AM ET
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Can’t trust them.
Thomas Bjerre Kristiansen
Thomas Bjerre Kristiansen Dec 03, 2021 12:00AM ET
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Well in some cases these ADR will explode in price if moved to HK
Fong SH
Fong SH Dec 03, 2021 12:00AM ET
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Oh but there are foreign investors & funds investing in Ali BaBa & Tencent too, explained please. Some foreign funds in Baidu & HKEX too Think I better go back to class to retake my Trader's Exam lol
Fong SH
Fong SH Dec 02, 2021 11:44PM ET
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It's normal for authorities to come down hard on home-grown companies listing elsewhere. As sensitive datas are at stake. Eg would US let Microsoft or Intel to list outside US? Same concept. Too risky to open up to the world. That's normal. Anyway, these kneejerks reactions will go over in no time, market will always be there, Invest with your mind not with your gut feelings, have a broad view for long time, not short term gains. Take care, wear a mask when outdoors.
Erski Gumby
SB20 Dec 02, 2021 11:44PM ET
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Mask outdoors. ROFL!!!
Fong SH
Fong SH Dec 02, 2021 11:44PM ET
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Erski Gumby  Well, I meant well, wear a mask when you're outside, the Covid-19 is serious, take care
Lake Lot
Lake Lot Dec 02, 2021 11:44PM ET
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Vaccinate , wear mask or ventilate and die . Simple
Andrew Ulferts
Andrew Ulferts Dec 02, 2021 11:44PM ET
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Lake Lot Geez, my whole fam just got over the China flu, even my 82 year old grandma. Nobody died at all. Actually, it really wasn’t even that bad. We’ve all been sicker than that before. What type of fake news high are you on?
Patryk Sl
Patryk Sl Dec 02, 2021 11:21PM ET
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yeah, coz all the world cares about didi delisiting....
 
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