Stocks fell in Europe and Asia on Friday ahead of the release of US jobs data.
Optimism about steps taken by China to ease tight pandemic controls appears to have faded, replaced by worries about indications that a recession could be looming.
Oil prices fell as the European Union edged closer to a $60-a-barrel price cap for Russian oil in a move to keep Russian oil flowing to world markets while limiting capacity of President Vladimir Putin to finance his war in Ukraine.
Benchmark U.S. crude oil fell 16 cents to $81.06 a barrel in electronic trading on the New York Mercantile Exchange. It gained 67 cents to $81.22 a barrel on Thursday.
Brent crude, the oil pricing standard for international trade, fell 6 cents to $86.82 a barrel.
The German DAX was flat at 14,489.59 and the CAC 40 in Paris fell 0.5% to 6,723.62. Britain’s FTSE 100 fell 0.5% to 7,522.46.
Futures on the S&P 500 and the Dow Jones Industrial Average were down 0.1%.
The stock was muted as traders awaited a closely-watched monthly jobs report due out on Friday that will show how the labor market is holding up, which could influence what the Fed does next in its bid. to calm inflation.
A moderate reading could improve buying sentiment, Live.com’s Ipek Ozkardeskaya said, given that “investors are dying for price in the Golden Loop scenario, which is the sweet combination of a slowing inflation, but a slight economic slowdown, which means a slight deterioration in the US employment data.
Stocks fell in New York on Thursday after a closely watched US inflation gauge by the Federal Reserve eased in October, raising questions about the central bank’s determination to keep raising interest rates. interest in controlling price increases.
A report from the Institute for Supply Management also showed prices falling and U.S. manufacturing contracted in November for the first time since May 2020.
Slower growth due to tighter monetary policies slowed new orders and order books, “which saw manufacturing conditions contract for the first time since June 2020,” said IG’s Jun Rong Yeap. in a report. This may suggest that with “inflation risks now behind us, ‘bad news’ in economic data may not be ‘good news’ for markets as fears of recession may surface,” he said. he declared.
Signs of weakening trade, particularly for export-dependent economies in Asia, heightened concerns about slowing growth in China and its implications for the global economy.
Tokyo’s Nikkei 225 lost 1.6% to 27,777.90 and the Hang Seng in Hong Kong fell 0.3% to 18,675.35. The Kospi in Seoul fell 1.8% to 2,434.33.
The Shanghai Composite fell 0.3% to 3,156.14 and Australia’s S&P/ASX 200 slipped 0.7% to 7,301.50.
Bangkok’s SET index lost 0.5% and Mumbai’s Sensex fell 0.7%.
The declines followed a 0.1% pullback in the benchmark S&P 500 on Thursday. Dow Jones Industrials fell 0.6%, while the Nasdaq edged up 0.1%. The Russell 2000 Small Business Index fell 0.3%.
Markets rallied on Wednesday after Fed Chairman Jerome Powell said the central bank may begin to moderate its pace of rate hikes at its next meeting in mid-December. The Fed, however, has been very clear about its intention to continue raising interest rates until it is certain that inflation is easing.
A big concern for Wall Street is whether the Fed can get rates under control without sending the economy into a recession as it dampens growth. Businesses are seeing falling demand for a wide range of goods as inflation squeezes portfolios. Analysts generally expect the United States to plunge into a recession, even if mild and short, at some point in 2023.
In currency trading, the US dollar slipped to 133.90 Japanese yen from 135.31 yen on Thursday evening. The euro fell from $1.0522 to $1.0540.
Elaine Kurtenbach/Associated Press
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