World equities rise, dollar drops on soft labour market data

by Jonathan Adams
Global equities

MSCI’s gauge of stocks across the globe added 0.60% to 811.63, while Europe’s broad STOXX 600 index gained 0.81%

World equities rose while the U.S. dollar dropped on Wednesday following soft labour market data that buoyed investor expectations of Fed interest rate cuts later this year.

U.S. Labor Department data on Wednesday showed that initial claims for unemployment rose to 238,000 the week that ended June 29, marginally above expectations and suggesting a softening in labour market conditions.

MSCI’s gauge of stocks across the globe added 0.60% to 811.63, while Europe’s broad STOXX 600 index gained 0.81%.

We have slowing growth but closer to trend, with the potential for the Federal Reserve to start lowering rates by maybe September, and earnings which have been still pretty good, that’s a pretty good backdrop still, according to Jack Janasiewicz, lead portfolio strategist at Natixis Investment Managers in Boston.

On Wall Street, the benchmark S&P 500 and Nasdaq were gaining with technology, utilities and materials stocks among the top gainers. Healthcare equities were dragging the Dow lower.

The DJIA dropped 0.19% to 39,259.90, the S&P 500 added 0.24% to 5,521.98 and the Nasdaq Composite advanced 0.50% to 18,119.62.

The dollar index dropped 0.43% at 105.21, with the euro 0.5% higher at $1.0798.

From a seasonality perspective, the first two weeks of July tend to be good and we are kind of following those seasonal patterns in that the economic numbers continue to point to a slowing economy, not a slow economy, and everything else is still pretty supportive in here, he said.

Benchmark 10-year Treasury yields slid following the jobless claims data as well as signs of weakness in manufacturing, as the ISM Non-Manufacturing index came in below expectations. The yield on benchmark U.S. 10-year notes dropped 8.5 bps to 4.351%.

The yen dipped to a new 38-year low against the U.S. dollar and a record low versus the euro ahead of the July 4 holiday in the US. The yen dropped to 161.96 per dollar for the first time since December 1986.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Trading and Investment News. The information provided on Trading and Investment News is intended for informational purposes only. Trading and Investment News is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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