A gauge of global stocks fell for a third consecutive day on Friday amid uncertainty about global economic growth and trade tensions, posting its first weekly drop this year, while the U.S. dollar tallied its strongest week since August.
MSCI’s gauge of stocks across the globe shed 0.35 percent on the day, and dropped for the week following six consecutive weekly increases. Still, Wall Street’s main equity indexes rallied late in the day on Friday, with the benchmark S&P 500 ending marginally positive.
Investors were digesting economic and trade developments from Thursday, when the European Commission sharply cut its forecast for euro zone growth this year and next and U.S. President Donald Trump said he did not plan to meet with Chinese President Xi Jinping before a March 1 deadline to achieve a trade deal.
“Right now, the focus really is on China,” said Mark Otto, global markets commentator for GTS in New York. “The market doesn’t like uncertainty, and it seems to be in abundance at this particular time.”
Canada’s main stock index fell on Friday as fears of a broadening global economic slowdown and data that showed a rise in unemployment rate kept investors away from riskier bets.
The Toronto Stock Exchange’s S&P/TSX Composite index was unofficially down 70.03 points, or 0.45 per cent, at 15,633.33.
Eight of the index’s 11 major sectors were lower.
The energy sector dropped 0.9 per cent despite a rise in oil prices, while health care stocks were down 2.9 per cent as marijuana producers slipped.
The financials sector slipped 0.4 per cent. The Bank of Canada looks set to leave interest rates unchanged next month.
The unemployment rate ticked up to 5.8 per cent in January as more people sought work, according to a Statistics Canada report, which also showed a strong gain in jobs numbers.
Economists said low wage growth and sagging oil prices would hold back any action by the central bank when it decides on interest rates on March 6.
The Dow Jones Industrial Average fell 63.27 points, or 0.25 per cent, to 25,106.26, the S&P 500 gained 1.83 points, or 0.07 per cent, to 2,707.88 and the Nasdaq Composite added 9.85 points, or 0.14 per cent, to 7,298.20.
Analysts now expect first-quarter earnings for S&P 500 companies to decline 0.1 per cent from a year earlier, which would be the first such quarterly profit decline since 2016, according to IBES data from Refinitiv.
“The sentiment continues to be investor anxiety about U.S.-China trade relations, the slowing global growth, and I think this week what is starting to really creep into investors’ anxiety is around corporate earnings,” said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.
The pan-European STOXX 600 index lost 0.56 per cent.
The dollar edged higher against a basket of currencies, and had its strongest weekly gain in six months, as traders piled into the greenback in a safe-haven move on worries about a weakening global economy.
The dollar index rose 0.13 per cent, with the euro down 0.17 per cent to $1.1321.
“The rally that propelled the dollar broadly higher last year has enjoyed renewed life with U.S. growth remaining solid while peers abroad lose momentum,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
U.S. Treasury yields fell for a fourth straight session.
Benchmark U.S. 10-year notes last rose 6/32 in price to yield 2.6339 per cent, from 2.654 per cent late on Thursday.
Oil prices were little changed on the day, but fell for the week on renewed concerns about slowing global demand.
U.S. crude settled up 0.2 per cent at $52.72 per barrel and Brent settled at $62.10, up 0.8 per cent.
Reuters