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Markets

Stock markets push higher despite disappointing US jobs data

  • Markets had been keenly awaiting the US jobs report for January to get an indication about whether the economic recovery is gaining or losing steam.
Published February 5, 2021

London: Global stock markets pushed higher Friday despite a lacklustre US jobs report, as optimism grows thanks to stimulus moves and slowing coronavirus rates and vaccine rollouts.

Markets had been keenly awaiting the US jobs report for January to get an indication about whether the economic recovery is gaining or losing steam.

The report showed the US economy added only 49,000 jobs as the coronavirus pandemic continued to hamper business, far short of expectations of a gain of 105,000 expected by analysts.

Stephen Innes, chief global markets strategist at Axi, called the report a "double clunker" as the December figure was revised to a drop of 227,000 jobs from an initial estimate of 140,000.

However, he said it was "pretty much a look-through thanks to US stimulus and vaccine narrative(s)" keeping the attention of investors.

Naeem Aslam at AvaTrade said the jobs report was worrisome as it showed that the resilience that had been seen in many areas of the US economy is no longer there.

Patrick J. O'Hare at Briefing.com said: "The key takeaway from the report is that it will paint the case in Washington for more stimulus. The market knows that, but then again, it has already been banking on more stimulus coming."

Expectations that US President Joe Biden will be able to push through his $1.9-trillion stimulus package for the economy has been boosting market confidence for weeks.

Senate Democrats pushed through in the early hours of Friday a measure that will allow approval of a stimulus package by a simple majority vote.

The S&P 500 and Nasdaq Composite both moved higher from record closing levels on Thursday.

In Europe, both Frankfurt and Paris were higher in afternoon trading.

However, London gave up its gains after the US jobs report was announced as the pound rose against the dollar which tends to hurt the share prices of multinationals listed on the FTSE 100 that earn most of their revenue in dollars.

Meanwhile, oil prices continued to climb on rising demand expectations as people return to more normal lives.

Brent North Sea reached $59.75 per barrel to stand almost at pre-pandemic levels.

While virus infections and deaths remain high, investors are hopeful that a slowdown in rates, combined with vaccines will soon allow governments to begin easing containment measures.

On the corporate front Friday, Chinese short-video app company Kuaishou -- a major rival to TikTok -- nearly tripled on its market debut following a $5.4-billion initial public offering that was the biggest for an internet firm since Uber's May 2019 listing.

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