Market participants reduced their riskier holdings in yesterday’s trading sessions, weighed by currency intervention threats from Japanese officials and talks of larger stimulus efforts from the European Central Bank. The S&P 500 VIX, which is considered a gauge of market uncertainty, rose 2.07 points to 16.16 (+14.69%) to indicate a return in risk aversion.
The Dow 30 index closed 174.09 points down to 17,541.96 (-0.98%), the S&P 500 index was 24.75 points lower to 2,041.91 (-1.20%), and the Nasdaq ended 72.35 points down to 4,848.37 (-1.47%).
US data was slightly stronger than expected, as initial jobless claims landed at 267K versus the projected 271K figure. Meanwhile, Fed Chairperson Janet Yellen expressed a bit more optimism than usual, as she assured that there is no economic bubble about to burst in the US.
European equities continue slump
European markets closed lower for yet another day, as ECB Governor Mario Draghi reiterated that they’re ready to do whatever it takes to boost growth and inflation. The German DAX slipped 93.89 points down to 9,530.62 (-0.98%), the French CAC 40 was down 38.73 points to 4,245.91 (-0.90%), and the Euro Stoxx 50 slipped 42.37 points to 2,866.99 (-1.46%).
In the UK, the London FTSE was down 24.74 points to 6,136.89 (-0.40%) as Brexit concerns continued to weigh on investor activity. UK manufacturing production data is due today and analysts are expecting to see a 0.2% decline.
Commodities hold on to gains
Interestingly enough, commodities and related shares were able to hold on to some of their gains ahead of the release of US rig count reports today. WTI crude oil is up to $37.95/barrel and Brent crude oil is trading at $39.92/barrel. Gold is also higher to $1,238.10/ounce, although this might be indicative of safe-haven demand on increased uncertainty in the financial markets.
Most Asian equities are currently in the red so far, as the week could end on a downbeat note. The Nikkei 225 is down 84.36 points to 15,673.77 (-0.48%), the S&P ASX 200 is down 19.98 points to 4,944.10 (-0.42%), and the China A50 index is down 45.41 points to 9,497.62 (-0.47%).
Up ahead, the main event risk for the day is the Canadian jobs report, which should shed more light on how the recent oil slump is affecting industries and jobs in the country. Analysts are expecting to see a 10.4K pickup in hiring and a stronger than expected result could allow a bit of risk appetite to return before the end of the week.
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