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LONDON: Global stocks stayed close to their all-time highs on Monday as investors weighed soaring European business activity and a welcome US employment report against concerns over the highly transmissible delta variant of COVID-19.
The STOXX index of Europe’s top 600 companies rose 0.3%, reversing earlier losses after data showed eurozone companies grew their business at the fastest pace in 15 years in June.
UK service business activity also picked up in June, albeit at a slightly slower pace. The UK FTSE rose 0.5%.
French stocks also recouped losses suffered after Health Minister Olivier Veran warned France could be heading for a fourth wave of the pandemic due to the delta variant.
COVID-19 angst has also weighed on stocks in Japan: The Nikkei fell 0.6% to a two-week low following a spike in infections in Tokyo, just weeks before the city does host the Olympics.
Japan’s service sector activity contracted for the 17th consecutive month in June, according to a survey.
The largest MSCI index of Asia-Pacific stocks outside of Japan was stable. China’s blue-chip stock index recovered from earlier losses to rise 0.1%, as Beijing’s pledges of continued political support for its tech sector helped to counter concerns over the crackdown on the tech giant. Didi Global carpooling and scrutiny of other platform companies nationwide.
The MSCI All Country World Index closed at a record 724.66 last week and was up 0.1% on Monday.
Trading was smoother than usual, with US markets closed for the extended July 4th weekend.
“The markets in general are always trying to find their feet,” said James Athey, chief investment officer, Aberdeen Standard Investments.
“Stocks, of course, continue to ignore or ignore anything that could be considered slightly negative as they continue their happy and complacent dance towards an inevitable calculation.”
Futures on S&P 500 signaled a flat open for Tuesday, after the index closed 0.8% higher to a record high on Friday. The Dow Jones Industrial Average rose 0.4% and the Nasdaq Composite rose 0.8%. set another record.
The non-farm payroll in the United States increased 850,000 jobs more than expected last month, according to data on Friday. But the unemployment rate unexpectedly rose to 5.9% from 5.8%, while the closely watched average hourly wage, an indicator of wage inflation, rose 0.3% last month, lower than the consensus forecast of a 0.4% increase.
“The feel of a golden loop suggests that there is no need to accelerate the reduction schedule or the implied rate hike profile,” National Australia Bank analyst Tapas Strickland wrote in a note. customer.
“Overall, the wage bill is still 6.8 million below pre-pandemic levels of February 2020 and remains below the level of substantial progress required by the Fed. As such, there is nothing in this report for the Fed to become hawkish. “
All eyes will be on the minutes of the Federal Open Markets Committee meeting last month, when policymakers surprised markets by reporting two rate hikes by the end of 2023.
Comments from Fed officials since then have been more balanced, particularly from President Jerome Powell, as investors analyze Wednesday’s post for further clues about the timing of the policy tightening.
Eurozone government bond yields rose, but analysts expect the recent downward path to resume after US wage data.
The yield on the 10-year German Bund rose by one basis point to -0.222%.
The dollar weakened after falling from a three-month high late last week, under pressure from weaker details of the U.S. wage report.
It gained around 0.2% against the New Zealand dollar, which was at $ 0.7022, traded 0.1% to 110.92 yen, and fell 0.1% to 1.1876 $ for one euro.
Brent crude rose 0.2% to $ 76.32 per barrel, and US crude rose 0.2% to $ 75.31 per barrel.