New US un­em­ploy­ment claims fall to 1.3 mil­lion with global mar­kets on ris­ing tra­jec­tory

The National - News - - BUSINESS -

Ap­pli­ca­tions for un­em­ploy­ment ben­e­fits in the US de­clined last week by more than pro­jected, eas­ing con­cerns of a re­newed down­turn in the labour mar­ket af­ter sev­eral large states re­ported an in­crease in coro­n­avirus cases.

Ini­tial job­less claims in reg­u­lar state pro­grammes fell by 99,000 to 1.31 mil­lion in the week ended July 4, Labour Depart­ment data showed on Thurs­day. The me­dian fore­cast in a Bloomberg sur­vey of econ­o­mists called for 1.375 mil­lion.

Con­tin­u­ing claims – the to­tal num­ber of Amer­i­cans claim­ing on­go­ing un­em­ploy­ment ben­e­fits in state pro­grammes – de­clined to 18.1 mil­lion in the week ended June 27, com­pared with a me­dian pro­jec­tion of 18.8 mil­lion.

The larger-than-fore­cast fall in ini­tial job­less claims re­as­sured in­vestors about the recovery of the world’s big­gest econ­omy with US equity fu­tures trad­ing mod­estly higher.

Fu­tures on the S&P 500 In­dex in­creased 0.1 per cent as of 4:34pm UAE time. The dol­lar slipped and Trea­suries nudged higher.

In Europe, stocks rose for the first time in three days, with shares in the re­gion’s largest tech­nol­ogy com­pany, SAP, jump­ing more than 7 per cent af­ter it re­ported bet­ter-than-ex­pected sec­ond quar­ter rev­enue on re­turn­ing de­mand for soft­ware in Asia.

The Stoxx Europe 600 In­dex rose 0.4 per cent. The UK’s FTSE 100 In­dex de­clined 0.4 per cent. Gold held above $1,800 an ounce. Oil was steady around $41 a bar­rel in New York af­ter swelling US crude stock­piles raised fresh con­cerns about over­sup­ply.

In­vestors con­tinue to largely look past news of ris­ing virus in­fec­tions, con­cen­trat­ing on the con­tin­ued re­open­ing of economies. Con­fi­dence in im­prov­ing eco­nomic data and pol­icy sup­port mea­sures has mostly held firm, even as Hong Kong re­ported its big­gest jump in cases since the start of the pan­demic. The num­ber of US in­fec­tions topped 3 mil­lion, more than a quar­ter of the global to­tal.

“Risk is bounc­ing back broadly in eq­ui­ties but the real show is in Chi­nese eq­ui­ties, US tech­nol­ogy stocks and then gold,” said Steen Jakob­sen, chief in­vest­ment of­fi­cer at Saxo Bank.

“US Covid-19 cases rose yes­ter­day to a new record and signs are now emerg­ing that daily deaths are on the rise na­tion­ally which could sud­denly be­come a new risk fac­tor for the mar­ket.”

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