Global sharemarkets eased on Thursday on concerns about the continuing impact of COVID-19 and renewed US-China tensions, though oil markets ignored those worries and reached 10-week highs.
Markets noted but didn’t really fret about the news that another 2.4 million Americans had applied for unemployment benefits last week, bringing the total number of first-time applications to 38.6 million since the coronavirus pandemic hit the world’s largest economy nine weeks ago.
That’s roughly 25% of the American workforce – about equal to some estimates of unemployment in the Great Depression.
It was the seventh consecutive weekly decline in initial jobless claims and was in line with market forecasts. It means the jobless queues in the US are now 16 million more than the 22 million jobs created in the long boom from 2009 to the start of this year.
The figure was well down on the peak of 6.87 million claims at the end of March, but in another period would be an all-time high.
The Dow fell 0.41% or 101 points to end at 24,474.12 points, the S&P 500 lost 0.78% or 23 points to 2,948.51 while the Nasdaq shed almost 91 points or 0.97%, to close at 9,284.88.
The S&P 500 has surged over 30% from its March 23 low, but it remains down about 13% from its February 19 record high.
Almost half of S&P 500 stocks are down still down 20% or more from that February peak which tells us the rebound has been uneven and not very convincing.
Bourses in London, Paris, and Frankfurt fell around 1%, but Wall Street declined less than half that.
ASX 200 futures were showing a small fall of 3 points at 7 am after the 22.6 point drop on Thursday which came after an early rise.
President Donald Trump warned the United States would react “very strongly” against China trying to gain more control over Hong Kong through new national security legislation.
The dollar traded in a narrow range as investors weighed the impact of global business lockdowns and the euro’s four-day rally against the greenback ran out of steam.
The Aussie dollar touched 66 US cents for the first time for more than two months.
Comex gold fell 1.7% or $US30 to settle at $US1,721.90 an ounce, as a strong dollar pushed it off this week’s 7-1/2 year peak. Silver fell 66.7 cents, or 3.7%, to $US17.364 an ounce, on Comex, while copper fell 1.1% to $US2.432 a pound.
Iron ore rebounded from Wednesday’s dip, adding $US1.31 to $US98.26 a tonne for 62% Fe fines delivered to northern China.
Purchasing manager index surveys in Europe and Australia confirmed economic activity has begun to return, though they were still weak and showing little sign of strength.
The eurozone surveys came in better than expected overall but Germany’s improvement was short of forecasts. The surveys remained firmly in economic contraction territory.
Oil rose on the view that slumping fuel demand should rebound. Brent, the international benchmark, is up $US20 a barrel over the past month as fears about storage and demand have eased thanks to rapid production cuts.
US West Texas Intermediate crude futures rose 43 cents to settle at $US33.92 a barrel, while Brent crude futures settled up 31 cents at $US36.06 a barrel.