China industrial data offsets trade jitters; oil rises

Stocks across the globe were little changed on Monday as upbeat industrial data out of China and hopes for more stimulus in the United States were offset by jitters over tensions between Washington and Beijing.

Technology stocks fell after a run of recent gains, while crude oil prices jumped.

Industrial output in China is returning to levels before the coronavirus pandemic halted huge swathes of the economy, driven by pent-up demand, government stimulus and surprisingly resilient exports.

On Wall Street, the Dow industrials touched a 5-month high but the Nasdaq fell as much as 1.5% after hitting a record high last week.

Tension between the United States and China ahead of scheduled trade talks at the weekend to review an agreement signed in January was being blamed for the lack of clarity in the market’s direction.

Talks in Washington over a US fiscal stimulus package caused further uncertainty for investors. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin on Sunday said they were open to resuming negotiations on aid for stricken businesses and workers.

President Donald Trump has sought to take matters into his own hands, signing executive orders and memorandums aimed, among other things, at unemployment benefits, although they were smaller than the package that had been in place for weeks.

The Dow Jones Industrial Average rose 277.86 points, or 1.01%, to 27,711.34, the S&P 500 gained 6.31 points, or 0.19%, to 3,357.59 and the Nasdaq Composite dropped 42.36 points, or 0.38%, to 10,968.62.

The pan-European STOXX 600 index rose 0.30% and MSCI’s gauge of stocks across the globe gained 0.08%.

Emerging market stocks lost 0.35%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.07% lower, while Japan’s Nikkei lost 0.39%.

Oil rose, supported by the Chinese factory data, rising energy demand and hopes for an agreement in the United States on more coronavirus-related economic stimulus.

US crude recently rose 2.3% to $42.17 per barrel and Brent was at $45.16, up 1.71% on the day.

The greenback ticked up against a basket of peers after posting its seventh consecutive weekly loss on Friday. Traders focused on fiscal stimulus in the United States and US-China tensions ahead of trade talks on Aug. 15.

The dollar index rose 0.103%, with the euro down 0.31% to $1.1749.

The Japanese yen strengthened 0.05% versus the greenback at 105.89 per dollar, while Sterling was last trading at $1.3083, up 0.25% on the day.

Spot gold dropped 0.1% to $2,032.69 an ounce.

US job openings rise: US job openings increased in June but the surge in vacancies was accompanied by a rise in workers quitting their positions at hotels, restaurants and bars, likely because of fears of exposure to COVID-19 and problems securing child care.

Despite the increase in vacancies reported by the labour Department on Monday, job openings remained below their pre-pandemic level, supporting the view that it could take the labour market years to recover from the public health crisis.

Job openings, a measure of labour demand, rose 518,000 to 5.9 million on the last day of June, the labour Department said in its monthly Job Openings and labour Turnover Survey, or JOLTS. Vacancies were below their level of 7 million in February.

There were an additional 198,000 job openings in the accommodation and food services industry. Vacancies also increased in the health care and social assistance sector. Overall, the job openings rate rose to 4.1% from 3.9% in May.

The number of people voluntarily quitting their jobs increased 531,000 to 2.6 million. Those quitting jobs in the healthcare and social assistance industry rose by 106,000, while the jump in the accommodation and food services sector was 104,000. The retail sector saw an increase of 99,000 quitting.

The quits rate, which under normal circumstance is viewed by policymakers and economists as a measure of job market confidence, increased to 1.9% from 1.6% in May.

The JOLTS report followed on the heels of news last Friday that the economy created 1.763 million jobs in July, decelerating from a record 4.791 million in June. The economy has regained 9.3 million of the 22 million jobs lost between February and April. There were 16.3 million unemployed last month, though 31.3 million were on jobless benefits in mid-July. With June’s vacancies, there were three people per job opening.

Reuters