Global Shares Mixed on Monday
TOKYO (AP) -- Global shares were mixed on Monday after a disappointing U.S. jobs report signaled to investors that interest rates will likely stay low.
France's CAC 40 dipped nearly 0.2% to 6,374.45 in early trading, while Germany's DAX fell 0.2% to 15,375.92. Britain's FTSE 100 edged 0.1% higher to 7,137.48. The future for the Dow industrials rose 0.2% to 34,755.00 while the S&P 500 future was unchanged at 4,224.60.
The U.S. economy is regaining momentum as the rate of coronavirus vaccinations rises, but Friday's U.S. jobs report was a massive disappointment. The market's most anticipated economic data of each month, it showed employers added just 266,000 jobs in April, far fewer than the 975,000 jobs that economists were expecting. It was a steep drop from March's hiring pace of 770,000.
The weak jobs number suggests the economy is still in recovery mode and bolsters the case for the Federal Reserve to keep interest rates low.
The Fed has been holding short-term rates at a record low and buying $120 billion in bonds every month, helping drive the stock market's rebound from its pandemic low in March 2020. Investors have been fretting that a supercharged economy could spur higher, persistent inflation, forcing the U.S. central bank to raise rates.
“Obviously this release blew market bets about Fed tapering and inflation out of the water," Michael Every of RaboResearch said in a commentary. “Indeed, there is now a stronger view that central banks can carry on pumping asset markets and commodity prices -- and so headline CPI -- in the hope this will magically generate wage inflation."
In Asian trading, Japan's Nikkei 225 rose 0.6% to finish at 29,518.34. Australia's S&P/ASX 200 jumped 1.3% to 7,172.80. South Korea's Kospi added 1.6% to 3,249.30. Hong Kong's Hang Seng slipped less than 0.1% to 28,595.66, while the Shanghai Composite added 0.3% to 3,427.99.
In Japan, worries are growing about tens of thousands of athletes and officials entering the country for the Tokyo Olympics, set to open in July. Many will be from countries where people have been vaccinated, while the rollout has been extremely slow in Japan, with about 3% of the population inoculated so far. The Tokyo Olympics organizers are promising stringent measures to prevent clusters and testing the athletes and officials regularly for infections.
Recent relatively strong global earnings reports have lifted share prices. Among companies reporting earnings later this week are Japanese automakers Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co.
On Friday, the S&P 500 index rose 0.7% to 4,232.60, its third straight gain, and topping the previous all-time high set last month. The Dow Jones Industrial Average gained 0.7% to 34,777.76, setting a record high for a third straight day. The Nasdaq composite picked up 0.9%, to 13,752.24.
Small company stocks also got a solid bump. The Russell 2000 index outgained the major stock indexes, climbing 1.4% to 2,271.63.
In energy trading, benchmark U.S. crude added 43 cents to $65.33 a barrel in electronic trading on the New York Mercantile Exchange. It gained 19 cents to $64.90 per barrel on Friday. Brent crude, the international standard, gained 47 cents to $68.75 a barrel.
In currency trading, the U.S. dollar rose to 108.82 Japanese yen from 108.59 yen late Friday. The euro inched up to $1.2168 from $1.2167.