Global stocks fell on Friday and the dollar weakened for the first time in eight sessions after a disappointing U.S. payrolls report fanned concerns that the world economy was slowing.
Global economic growth worries remained on the front burner as data in China showed exports shrank 20.7 per cent in February from a year earlier while imports fell 5.2 per cent.
Help on the trade front to stem any slowdown did not appear to be on the horizon as White House trade adviser Clete Willems said on Friday that Trump administration officials have not made any new plans to send a team to China for face-to-face trade talks, although negotiators have made progress.
U.S. ambassador to China Terry Branstad told the Wall Street Journal that the two sides have yet to set a date for a summit as neither feels a deal is imminent.
“The market is worried about global growth and it has been worried about global growth for a while, so now you are seeing some confirmation on why the market has been concerned about that,” said Scott Wren, senior global equity strategist at Wells Fargo Investment Institute in St. Louis, Missouri.
Compounding concerns was a U.S. payrolls report that fell well short of expectations, although other measures within the report were strong, sending mixed signals to investors.
“There is a lot of noise in this thing, you almost have to throw this one out the window,” said Wren.
Canada’s main stock index dropped for a second day, with oil prices falling after weak China trade data and U.S. jobs growth report sparked fears of slowing global growth.
The energy sector dropped 2.2 per cent, leading the nine decliners among the 11 major sectors.
The Toronto Stock Exchange’s S&P/TSX composite index was down 60.30 points, or 0.38 per cent, at 15,996.21.
The interest-rate sensitive financials sector slipped 0.2 per cent, while the industrials sector fell 0.6 per cent.
The materials sector, which includes precious and base metals miners, added 1.3 per cent as spot gold was up 1 per cent at $1,298.66 per ounce, en route to a weekly gain of 0.4 per cent.
Leading the index were Alacer Gold Corp., up 13.5 per cent, Iamgold Corp., up 10.7 per cent, and MAG Silver Corp., higher by 8.5 per cent.
Lagging shares were Enghouse Systems Ltd., down 8.7 per cent, Ivanhoe Mines Ltd., down 5.8 per cent, and Labrador Iron Ore Royalty Corp., lower by 5.8 per cent.
In New York, the Dow Jones Industrial Average fell 23.12 points, or 0.09 per cent, to 25,450.11, the S&P 500 lost 5.89 points, or 0.21 per cent, to 2,743.04 and the Nasdaq Composite dropped 13.32 points, or 0.18 per cent, to 7,408.14.
The February data out of Beijing and mixed U.S. payrolls numbers came on the heels of a move by the European Central Bank to slash growth forecasts as it unveiled a new round of policy stimulus on Thursday.
The worries knocked European stock markets lower where the STOXX 600 index suffered its biggest daily percentage drop in a month and worst week this year.
The pan-European STOXX 600 index lost 0.89 per cent and MSCI’s gauge of stocks across the globe shed 0.89 per cent. MSCI’s index was on pace for its worst week since late December.
Stocks in Shanghai sank 4.4 per cent Friday after a report showed that Chinese exports plunged 20 per cent last month, far more than economists expected. It’s the latest wild move for a market that is notoriously volatile. The Shanghai index is still more than 19 per cent higher for the year, even with Friday’s plunge.
The dour report on China’s economy, the world’s second-largest, fed into growing worries about the health of the overall global economy. The Organisation for Economic Co-operation and Development said this week that it expects global growth to be 3.3 per cent this year, down from the 3.5 per cent that it had forecast just four months ago.
The OECD said economic prospects are weaker in nearly all the countries that make up the G20 than previously expected, and it cited a slowdown in trade and global manufacturing, among other reasons. The United States and China have been locked in a particularly tense trade dispute, though the countries say they’re making progress in negotiations.
Even with the lack of clarity around the jobs report, the dollar weakened for the first time in eight sessions. The Swedish crown fell to a 16-year low, before reversing course, as the Riksbank joined its central bank counterparts in Europe and Canada in adopting a cautious outlook.
The dollar index fell 0.35 per cent, with the euro up 0.45 per cent to $1.1242.
U.S. Treasury debt yields were modestly lower and relatively stable in the wake of the payrolls report. Benchmark 10-year notes last rose 4/32 in price to yield 2.6213 percent, from 2.636 percent late on Thursday.
Oil prices fell about 1 per cent on Friday after disappointing U.S. job growth revived concerns about a slowing global economy and weaker demand for oil.
With surging U.S. oil supply also unsettling markets, Brent crude futures fell 56 cents, 0.8 per cent, to settle at $65.74 a barrel. The international benchmark gained 1 percent for the week.
U.S. West Texas Intermediate (WTI) crude futures fell 59 cents, or 1 per cent, to settle at $56.07 a barrel. WTI rose 0.5 per cent for the week.
“If we see equity markets continue to sink, it will eventually drag energy prices lower with it,” Brian LaRose, a technical analyst at United-ICAP.
So far oil demand has held up, especially in China, where imports of crude remain above 10 million barrels per day (bpd). Yet a slowdown in economic growth could eventually dent fuel consumption and pressure prices.
On the supply side, oil has received support this year from output cuts led by the Organization of the Petroleum Exporting Countries. Saudi Arabia’s crude oil production in February fell to 10.136 million barrels per day (bpd), a Saudi industry source told Reuters.