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Global Stocks Up on US Job Gains 08/08 05:16
Global stocks gained Monday after strong U.S. jobs data cleared the way for
more interest rate hikes and Chinese exports rose by double digits.
BEIJING (AP) -- Global stocks gained Monday after strong U.S. jobs data
cleared the way for more interest rate hikes and Chinese exports rose by double
digits.
London, Shanghai, Tokyo and Frankfurt advanced. Hong Kong retreated. Oil
prices edged higher.
Wall Street's benchmark S&P 500 lost 0.2% on Friday after government data
showed American employers added more jobs than expected in June. That undercut
expectations a slowing economy might prompt the Fed to postpone or scale back
plans for more rate hikes to cool inflation.
"Now it seems they will be debating whether they need to be even more
aggressive," Edward Moya of Oanda said in a report.
In early trading, the FTSE 100 in London was up 0.4% at 7,471.08 and the DAX
in Frankfurt added 0.4% to 13,629.44. The CAC 40 in Paris advanced 0.6% to
6,512.74.
On Wall Street, the future for the S&P 500 rose 0.3% while that for the Dow
Jones Industrial Average was up 0.2%.
The S&P declined 0.2% on Friday after government data showed employers hired
more Americans in July than forecast. The Dow added 0.2% while the Nasdaq
composite lost 0.5%.
In Asia, the Shanghai Composite Index rose 0.3% to 3,236.93 after China's
July exports rose 18% over a year earlier, beating forecasts.
China's trade surplus swelled to $101 billion in July after imports rose
just 2.3% over a year ago, reflecting weak domestic demand.
The Hang Seng in Hong Kong fell 0.8% to 20,050.15 while the Nikkei 225 in
Tokyo gained 0.2% to 26.241.13.
The Kospi in Seoul gained less than 0.1% to 2,493.10 and Sydney's S&P-ASX
200 shed less than 0.1% to 7,020.60.
India's Sensex gained 0.9% at 58,892.25. Taiwan, New Zealand, Singapore and
Bangkok retreated while Jakarta gained.
Investors worry tighter policy from the Fed and central banks in Europe and
Asia to cool inflation that is running at multi-decade highs might derail
global economic growth.
Markets also have been rattled by Russia's war on Ukraine, which caused a
spike in prices of oil, wheat and other commodities, and by uncertainty about
Chinese anti-virus curbs that have disrupted manufacturing and shipping.
Last week's strong U.S. employment data gave ammunition to Fed officials who
say the economy can tolerate higher borrowing costs to cool inflation. After
Friday's announcement, traders expect the Fed to raise its benchmark rate by
0.75 percentage points next month, up from forecasts of half a point. That
would be triple the usual margin and the third such outsized hike this year.
Higher interest rates are meant to counter inflation by cooling business
activity, but that also raises the risk of recession and job losses. The latest
inflationary spike is unusual because forecasters have blamed shortages of
goods due to the coronavirus pandemic, rather than rapid economic growth.
Wall Street is coming off its best month for stocks since late 2020, a rally
driven by falling bond yields. Traders hoped the economy was slowing enough for
the Fed to ease off.
In energy markets, benchmark U.S. crude fell 56 cents to $88.45 per barrel
in electronic trading on the New York Mercantile Exchange. The contract rose 47
cents to $89.01 on Friday. Brent crude, the price basis for international
trading, shed 61 cents to $94.31 per barrel in London. It gained 80 cents to
$94.92 the previous session.
The dollar rose to 135.18 yen from Friday's 135.11 yen. The euro advanced to
$1.0187 from $1.0178.
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