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08/08/24
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Global Stocks Higher as Data Eases Recession Fears
On Thursday, a global equities index was more than 1% higher after softer-than-expected U.S. unemployment claims eased recession fears.
According to the U.S. Labor Department, first-time claims for state unemployment benefits dropped by 17K to a seasonally adjusted 233K for the week that ended on August 3, the biggest decline in around 11 months. Economists had forecast 240K claims.
TD Securities’ head of U.S. rates strategy, Gennadiy Goldberg, said it reinforced the fact that momentum in the labor market was not slowing to the same extent that was indicated by the payroll report.
Thursday’s data was monitored closely after Friday’s softer-than-expected jobs report for July helped spark a market rout in global financial markets on Monday.
Investors unwound carry trades, where they borrow cheaply in countries like Switzerland and Japan to buy dollars to invest in assets with higher yields. The unwinding on Monday helped trigger a 12% drop in Japanese stocks and the S&P 500 index followed with a drop of 3%.
The Nasdaq Composite climbed 350.88 points, or 2.17%, to 16,546.69, the S&P 500 gained 95.31 points, or 1.83%, to 5,294.81 and the Dow Jones Industrial Average was up 519.74 points, or 1.34%, to 39,283.19.
MSCI’s global index of stocks gained 8.40 points, or 1.09%, to 779.10. The STOXX 600 pan-European index inched up 0.05%.
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