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Stocks mixed ahead of US labour data

Asian equities traded mixed on Thursday as lower bond yields and softer oil prices improved sentiment, while investors awaited US labour-market figures due on Friday for further clues on the Federal Reserve’s (Fed) policy outlook. Wall Street ended Wednesday higher, with the Dow Jones Industrial Average leading gains after a three-day losing streak. Positive Chinese and Japanese services activity provided support for markets on Friday but investors remained wary of the Middle East conflict and the outlook for interest rates.

  • Date
  • Author Shane Strowmatt, Senior Investment Writer
  • Reading time 5 minutes

Mixed markets
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Asian equities were mixed on Thursday as lower global bond yields and softer oil prices supported risk appetite ahead of US employment data due on Friday. Japan’s Nikkei 225 slipped 0.3%, while Korea’s KOSPI declined 0.3%, Hong Kong’s Hang Seng Index fell 0.4% and Australia’s S&P/ASX 200 rose 0.4%. The ten-year US Treasury yield was trading below 4.8% after reaching multi-year highs, while the comparable Japanese yield declined about five basis points to 2.97% after briefly exceeding 3% earlier this week. Gold rose 0.9% to around USD 4430 per ounce on Thursday, while the US Dollar Index slipped 0.2% to 99.39. Mainland China’s CSI 300 was little changed after China’s private services PMI increased to 51.4 points in August from 50.4 in July, indicating stronger domestic demand. Meanwhile, Japan’s services sector expanded at its fastest pace in five months.

US stocks end higher

US equities rose on Wednesday, ending a three-day decline as oil prices remained broadly stable despite renewed US-Iranian attacks and continuing tensions in the Middle East. The Dow Jones Industrial Average gained 0.6% to 53,061.95 points, while the S&P 500 rose 0.5% to 7666.60 points and the Nasdaq-100 added 0.2% to 29,143.33 points. New York Fed President John Williams said recent data pointed to easing inflationary pressures, challenging market expectations that the Fed was almost certain to raise interest rates this month.

Broadcom shares fall despite strong results

Broadcom shares fell in after-hours trading on Wednesday despite the chipmaker reporting adjusted earnings of USD 3.32 per share and 86% year-on-year revenue growth to USD 29.6 billion in its fiscal third quarter, exceeding market expectations. Revenue from artificial-intelligence semiconductors rose 221% year-on-year to USD 16.7 billion, as demand for custom accelerators and networking equipment remained strong. However, its USD 34.8 billion revenue forecast for the current quarter fell short of market estimates.

European stocks end broadly lower

European equities ended mixed on Wednesday as easing oil prices supported sentiment despite persistent tensions in the Middle East. The Euro Stoxx 50 slipped 0.1% to 6362.85 points, while Switzerland’s SMI gained 0.2% to 14,362.97 points. Investors remained concerned that higher energy prices could lift inflation and prompt the European Central Bank to raise interest rates again this month.

Bank of Canada holds rates

The Bank of Canada left its overnight policy rate unchanged at 2.25% on Wednesday, citing a stronger domestic economy but heightened inflation risks from elevated oil prices and US tariffs. Canadian economic growth rebounded in the second quarter after a weak start to the year, supported by household spending, housing, exports and business investment, while unemployment declined slightly in July. Inflation has remained near 3% in recent months because of higher petrol prices, although it was 2.2% excluding petrol and core measures remained close to the 2% target. The central bank said the conflict in the Middle East and limited progress in reopening the Strait of Hormuz had increased upside risks to its inflation outlook.

Corporate and economic calendar

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: Swiss Consumer Price Index (08:30), Swiss gross domestic product (09:00), Italian Purchasing Managers’ Index (09:45), French Purchasing Managers’ Index (09:50), German Purchasing Managers’ Index (09:55), euro-area Purchasing Managers’ Index (10:00), UK Purchasing Managers’ Index (10:30), US weekly initial jobless claims (14:30), US trade balance (14:30), Canadian trade balance (14:30) and US Purchasing Managers’ Index (15:45).

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Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.