Wall Street ekes out another record high on jobs figures


Stocks on Wall Street wavered within a narrow range on Thursday as further economic data were reported in line with expectations.

Initial jobless claims in the US came in at 375,000 last week, down from 387,000 a week earlier and matching economists’ estimates, the labour department said on Thursday. This was the third week in a row that new applications had fallen.

The news suggested that the spread of the Delta variant of coronavirus was not “having quite the impact that had been feared”, said Danni Hewson, an analyst at AJ Bell, who added that the job market appeared to be staying “buoyant”.

On Wall Street, both the tech-leaning Nasdaq Composite and blue-chip S&P 500 were up 0.1 per cent at lunchtime in New York, the latter touching a fresh record high.

Such slight equity moves have become more commonplace for the past month. The Cboe’s Vix index, Wall Street’s so-called fear gauge that tracks expected volatility on S&P 500, fell more than 3 points to 15.5, significantly below its long-run average of 20 and well below the 80-plus mark hit during the height of the Covid-19 crisis in March 2020.

Line chart of Cboe Vix volatility index showing Wall Street's fear gauge slides to seven-week low

Shifts in currencies and government debt were equally subdued. The dollar was flat against a basket of trading peers while the yield on the 10-year US Treasury edged up 0.01 percentage point to 1.37 per cent.

Across the Atlantic, the pan-continental Stoxx Europe 600 benchmark gained 0.1 per cent to register another all-time high and stay in positive territory for nine consecutive sessions.

London’s FTSE 100 index slid 0.4 per cent as official figures showed that the UK grew 4.8 per cent in the second quarter, although this performance still lagged behind other advanced economies.

“The UK economy was the G7’s straggler for a fifth consecutive quarter, despite the rebound in Q2,” said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

In Asia, stocks in China and Hong Kong retreated after Beijing revealed its new economic agenda would focus on strengthening the Communist party’s regulatory grip over important sectors such as tech and healthcare.

The onshore CSI 300 index of shares listed in Shanghai and Shenzhen sank 0.8 per cent while Hong Kong’s Hang Seng index fell 0.5 per cent.

A wide-ranging document released on Thursday highlighted an “urgent need” for legislation in China to govern the education sector and resolve antitrust issues. It also called for legal frameworks for the digital economy, artificial intelligence, big data and cloud computing.

“In China, the evidence is now clear that we are seeing a policy shift and not a spasm of regulation,” wrote analysts at Rabobank.

Brent crude, the global oil benchmark, was little changed at $71.40 a barrel.

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