US stocks pared losses as the US dollar fell, while US Treasuries and gold gained after US employers last month added the fewest jobs in almost six years, bolstering the case for the US Federal Reserve to leave interests rates lower for longer.
Shares of commodity producers extended gains, helping the S&P 500 trim declines. The dollar tumbled the most in six months versus the euro, while investors sought the safest government securities, sending the yield on two-year Treasuries to the steepest drop since September last year and the yield on German 10-year bunds to a record low. The weak greenback sparked a rally in emerging-market assets and commodities.
“Things are never as bad or as good as they seem,” said Michael Arone, the Boston-based chief investment strategist at State Street Global Advisors’ US intermediary business, which oversees US$2 trillion. “Fed futures are pricing in a decreasing probability for June and stocks probably don’t mind that scenario all that much. We’re moving away from this risk-on, risk-off formula to one that’s more Fed on, Fed off.”
The addition of 38,000 jobs last month was less than the most pessimistic of forecasts in a Bloomberg survey, throwing cold water on equity gains that took the S&P 500 within 1.2 percent of its all-time high.
Smaller employment gains reduce the odds of a more pronounced upturn in economic growth at a time when corporate profits are on a downswing and global markets remain weak. The odds for a Fed rate increase next month fell to 27 percent, down from 55 percent a day earlier.
The S&P 500 fell 0.2 percent to 2,100.38 at 3:19pm in New York, after dropping as much as 1 percent. The benchmark reversed a weekly retreat, now set for a 0.1 percent advance, the third week of gains.
Utilities and telephone stocks advanced as the prospect for lower rates sent investors searching for shares that have large payout ratios. Raw-material shares also climbed after fluctuating earlier.
Newmont Mining Corp jumped 9 percent for the biggest gain in the S&P 500.
Financial shares trimmed losses to 1.3 percent, after falling as much as 2.4 percent. JPMorgan Chase & Co and Goldman Sachs Group Inc sank at least 1.7 percent. Insurers MetLife Inc and Prudential Financial Inc fell more than 3 percent.
The two-year Treasury note yield fell to 0.78 percent, while 10-year yields dropped 10 basis points to 1.7 percent.
The gap between yields on five and 30-year debt, a measure of the yield curve, steepened by the most since March.
“This was quite shocking — it’s way under expectations,” said Christopher Sullivan, who oversees US$2.3 billion as chief investment officer at United Nations Federal Credit Union in New York.
The Fed “will postpone a nearby rate hike for sure — maybe they’ll be forced to look beyond the summer,” Sullivan added.
Softbank Group Corp plans to keep a stake in the chip designer Arm Ltd, even if it sells a partial interest to Nvidia Corp, the Nikkei reported. The companies are negotiating terms, the newspaper reported, citing sources. Softbank might take a stake in Nvidia after it buys Arm, the report said. Nvidia and Arm might also merge through a share swap, and Softbank would become a major shareholder in the combined company, it said. The two parties aim to reach a deal in the next few weeks, the sources said, asking not to be identified because the information is private. Nvidia is the
END TO SPECULATION: The hotel’s management contract has been extended, despite reports that it wanted to end its alliance with Hyatt Hotels over a deal with Riant Capital Singapore-based Hong Leong Hotel Development Ltd (豐隆大飯店股份) yesterday said it has extended a management contract to ensure the continued presence of the Grand Hyatt brand in Taipei, ending rumors that the two sides were parting ways. “We are pleased Hyatt is able to come to terms on the extension of the management contract of Grand Hyatt Taipei,” said Kwek Leng Beng (郭令明), executive chairman of City Developments Ltd (城市發展) and Millennium & Copthorne Hotels Ltd (千禧國敦酒店). Hong Leong Hotel Development is a subsidiary of Millennium, and both fall under the Hong Leong Group (豐隆集團). The Grand Hyatt Taipei (台北君悅大飯店), owned and built by
Gold surged to a fresh record on Friday, fueled by US dollar weakness and low interest rates, while silver headed for its best month since 1979. Spot bullion is up more than 10 percent this month, as US real yields lingered near record lows. While the ferocity of rallies in gold and silver cooled in the middle of the week, most market watchers predict there might be more gains ahead. Both metals have added about 30 percent this year, with gold and silver exchange-traded funds boosting holdings to a record, as concern about the fallout from the COVID-19 pandemic fuels demand for
MOVING FROM CHINA? The article did not name the company, but Foxconn, Wistron and Pegatron were among firms chosen for a production-linked incentive plan in India An Apple Inc vendor is looking at shifting six production lines to India from China, which could result in US$5 billion of iPhone exports from the South Asian nation, the Times of India reported, citing people familiar with the matter who it did not identify. The establishment of the facility would create about 55,000 jobs over about a year, the newspaper reported, not naming the Apple vendor. It would also cater to the domestic market and expand operations to include tablets and laptops, the newspaper reported. Samsung Electronics Co and Apple’s assembly partners are among 22 companies that have pledged 110 billion