Global equities slid on Thursday on concerns about the long-term impact of the new coronavirus and renewed U.S.-China tensions, though oil markets ignored those worries and marched to a 2-1/2 month highs.
Canada’s main stock index edged lower on Thursday, weighed by bleak monthly domestic jobs data .
The nation lost 226,700 jobs in April, ADP payroll data showed, as the lockdowns imposed to the curb the spread of the coronavirus impacted economic activities with trade, leisure and hospitality among the hardest hit industries.
The Toronto Stock Exchange’s S&P/TSX composite index was unofficially down 112.78 points, or 0.75%, at 14,884.85.
The energy sector slid 2%, while the financial and industrials sectors were both down 1%.
The materials sector, which includes precious and base metals miners and fertilizer companies, lost 2% as gold futures fell.
Wall Street ended lower on Thursday, a day after hitting two-month highs, on a fresh wave of China-U.S. tensions that raised doubts about the trade deal reached early this year between the world’s two largest economies.
Unofficially, the Dow Jones Industrial Average fell 100.21 points, or 0.41%, to 24,475.69, the S&P 500 lost 23.1 points, or 0.78%, to 2,948.51, and the Nasdaq Composite dropped 90.90 points, or 0.97%, to 9,284.88.
The majority of the 11 S&P sector indexes declined, with energy and technology each down more than 1%.
The U.S. dollar traded in a narrow range as investors weighed the impact of global business lockdowns and the euro’s four-day rally against the U.S. currency ran out of steam.
Gold fell more than 1% as a strong dollar pushed it off this week’s 7-1/2 year peak.
Rising tensions between Washington and Beijing gave investors pause.
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. U.S. Secretary of State Mike Pompeo on Wednesday called China’s $2 billion pledge to fight the pandemic “paltry.”
“The biggest threat to the U.S. market this year is actually the potential for ignition of the tariff war, between the U.S. and China,” said Kristina Hooper, chief global market strategist at Invesco in New York.
Stocks in the short run are driven by news flow, though bias is to the upside because of easy monetary policy from the Federal Reserve, Hooper said.
MSCI’s gauge of stocks across the globe shed 0.69%, while the pan-European STOXX 600 index lost 0.75%.
Purchasing manager index surveys (PMIs) in Europe confirmed economic activity has begun to return, though they were far from stellar.
Euro zone-wide figures came in better than expected overall but Germany’s improvement undershot forecasts. It was the third month in a row that the surveys were plonked firmly in economic contraction territory.
Oil rose on the view that slumping fuel demand should rebound. Brent, the international benchmark, has bounced up $20 a barrel over the past month.
U.S. crude futures rose 43 cents to settle at $33.92 a barrel, while Brent settled up 31 cents at $36.06 a barrel.
The market absorbed the latest glut of government debt to pay for coronavirus support programs fairly smoothly. The United States on Wednesday auctioned $20 billion of 20-year debt, the first such sale since 1986.
Italy sold roughly the same on Thursday and Spain said it will need to raise almost 100 billion euros more than planned.
The benchmark U.S. 10-year notes fell 0.4 basis points to yield 0.6736%.
U.S. weekly jobless claims came in at a seasonally adjusted 2.4 million, in line with a Reuters survey of economists ahead of the data and well off the record 6.867 million at the end of March.
The dollar index rose 0.22%, with the euro down 0.23% to $1.0952. The Japanese yen weakened 0.13% versus the greenback at 107.68 per dollar.
U.S. gold futures settled 1.7% lower at $1,721.90 an ounce.
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