World shares stall near a four-month high

World shares stalled near a four-month high on Friday, as persistent coronavirus nerves tempered the recent recovery run.

The market rally, fuelled by Thursday’s record U.S. jobs numbers, largely blew itself out after a record daily total of new U.S. COVID-19 cases, though news of the fastest expansion in China’s services sector in over a decade kept Asia’s tail up early in the day.

Chinese shares had charged to their highest level in five years, helping the pan-Asian indexes to four-month peaks, so the sight of European markets stalling left traders floundering, especially with no Wall Street to pick things up again because of a U.S. market holiday.

More than three dozen U.S. states are now seeing increases in COVID-19 cases, including Florida, where they have leapt above 10,000 a day. And while Europe is largely easing restrictions, some places are having to keep them or reimpose them again.

In the U.S. the number of permanent job losses continued to rise, increasing by 588,000 to 2.9 million, while the unemployment rate remains a chunky 7.6 percentage points above its February level. A Deutsche Bank analysis put the U.S. unemployment rate behind all its developed market peers, barring Canada.

The recovery faces headwinds as the surge of new coronavirus infections prompts U.S. states to delay and in some cases reverse plans to let stores and restaurants reopen and activities resume.

Investors seem to have been largely overlooking the various virus spikes for now at least, and taking the view that things are still improving globally. A market fear gauge, the VIX volatility index , has seen its biggest drop in two months and German government bond yields were set for their biggest weekly rise in a month, though they nudged down on Friday to 0.44%.

Oil prices also eased after an otherwise solid week. Brent crude fell 0.65% to $42.86 a barrel while U.S. crude dropped 0.66% to $40.38 a barrel. Both were around $25 this time two months ago.

This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.