How are energy investors positioned?
By David Randall
NEW YORK, Oct 4 (Reuters) - Modest job growth in the United
States buoyed world stock markets broadly on Friday, helping
calm markets after one of the worst weeks for equities in
months.
The unemployment rate in the world's largest economy fell to
a 50-year low in September, helping ease worries that the United
States was on a path to recession after weak data earlier this
week showed a slowdown in U.S. manufacturing and services. The
string of weak data had sharply raised market expectations of
additional interest rate cuts by the Federal Reserve.
"We've had such a string of bad news, that anything that
shows the economy is doing better than perhaps people have been
talking about is well received," said J.J. Kinahan, chief market
strategist at TD Ameritrade in Chicago.
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.36%.
On Wall Street, the Dow Jones Industrial Average .DJI rose
132.15 points, or 0.5%, to 26,333.19, the S&P 500 .SPX gained
13.37 points, or 0.46%, to 2,924 and the Nasdaq Composite
.IXIC added 33.50 points, or 0.43%, to 7,905.77.
Bond yields were little changed, suggesting that investors
remain concerned about the U.S. economy. Benchmark 10-year notes
US10YT=RR last rose 5/32 in price to yield 1.5187%, from
1.536% late on Thursday.
Talks between Beijing and Washington will resume next week
to work towards a truce in the protracted trade spat between the
world's two largest economies, although hopes of a definitive
agreement are pretty low.
Traders see a 85% chance the Fed will cut rates by 25 basis
points to 1.75%-2.00% in October, up from 39.6% on Monday,
according to CME Group's FedWatch tool. FEDWATCH
The Fed has already cut rates twice this year as
policymakers try to limit the damage caused by the bruising
trade war.
"This jobs data probably reinforces the case that the U.S.
is now beginning to feel the effects of the ongoing global
slowdown and probably strengthens the case for additional rate
cuts, if the Fed chooses to go down that path," said Sameer
Samana, senior global market strategist at Wells Fargo
Investment Institute in St. Louis, Missouri.
Global equities could fall as much as 15-20% if negotiations
break down and President Donald Trump follows through with his
threat of car imports tariffs, UBS global chief investment
officer Mark Haefele warned on Friday.
The Swiss bank reckons there's a 50% probability that
additional duties will be announced by the year-end, potentially
pushing global growth down to 3% next year, the slowest pace
since the global financial crisis.
"Without a resolution to the U.S.-China trade dispute, we
see limited upside for stocks in the near-term, and given the
risks of further escalation we hold a modest tactical
underweight on equities," he said.
Easing concerns about the strength of the U.S. economy
bolstered oil prices, with U.S. crude CLc1 up 1.3% to $53.13 a
barrel, while Brent crude LCOc1 rose 1.8% to $58.76 per
barrel.
Global assets in 2019 http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets in 2019 http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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