· S&P 500 closes down, snapping four-day rally
The S&P 500 lost ground on Thursday as investors took profits in advance of Friday’s jobs report, ending a four-day rally driven by rising economic sentiment.
The Nasdaq joined the S&P 500 in negative territory, while the blue-chip Dow posted a nominal gain.
The Dow Jones Industrial Average rose 11.93 points, or 0.05%, to 26,281.82, the S&P 500 lost 10.52 points, or 0.34%, to 3,112.35 and the Nasdaq Composite dropped 67.10 points, or 0.69%, to 9,615.81.
Economic data showed the number of Americans filing for unemployment benefits dipped below 2 million for the first time since mid-March, and plummeting international commerce resulted in a net widening of the U.S. trade gap.
Its American counterpart, the U.S. Federal Reserve, is due to meet next week for its two-day policy meeting.
· Pompeo urges global stock exchanges to tighten rules for Chinese companies
Secretary of State Mike Pompeo warned American investors on Thursday against “fraudulent” accounting practices of China-based companies and suggest the Nasdaq’s recent decision to tighten listing rules for such players should be a model for all other exchanges around the world.
“The Trump administration is committed to ensuring that all American businesses and investors can operate on a level playing field with the rest of the world,” he said in a statement. “I applaud Nasdaq for requiring auditing firms to ensure all listed companies comply with international reporting and inspection standards.”
“Nasdaq’s announcement is particularly important given a pattern of fraudulent accounting practices in China-based companies,” Pompeo added.
The secretary’s comments represent the latest flashpoint in the relationship between Washington and Beijing at a time of escalating tensions between the world’s two largest economies over trade, the handling of the coronavirus pandemic as well as a spat over Hong Kong.
President Donald Trump on Friday said his administration would begin the process of eliminating special U.S. treatment for Hong Kong to punish China, saying Beijing’s move to impose new national security legislation meant the territory no longer warranted U.S. economic privileges.
· European markets close lower as ECB expands crisis bond-buying program
European stocks closed lower Thursday after the European Central Bank announced a larger-than-expected expansion of its coronavirus stimulus program.
The pan-European Stoxx 600 closed down by almost 0.8% provisionally following the ECB decision, with all sectors turning negative. Auto shares were the worst performers, falling 1.7%.
The euro zone’s central bank announced a 600 billion euro ($672 billion) expansion of its Pandemic Emergency Purchase Programme (PEPP), a larger increase than analysts had been expecting. The PEPP expansion comes on top of an existing 750 billion euros of government bond purchases set out in March, bringing the total value of asset purchases to 1.35 trillion euros in a bid to weather the euro zone’s worst economic downturn since World War II.
Investor sentiment was shaken after ECB President Christine Lagarde said the euro zone faced an “unprecedented contraction.” The central bank updated its forecasts, saying it now expects the economy to contract by 8.7% this year, before rebounding to 5.2% growth in 2021 and 3.3% in 2022. Those projections were significantly worse than the ECB’s own forecasts in March.
· Asia Pacific stocks mixed as Wall Street snaps winning streak
Stocks in Asia Pacific were mixed in Friday morning trade after major stock indexes on Wall Street snapped their winning streak overnight.
In Japan, the Nikkei 225 dipped 0.31% in early trade while the Topix index shed 0.17%. South Korea’s Kospi, on the other hand, added 0.11%.
Meanwhile, the S&P/ASX 200 declined 0.21%.
Overall, the MSCI Asia ex-Japan index traded 0.05% lower.
Developments on economic stimulus as countries attempt to recover from the coronavirus pandemic likely continued to be watched. The European Central Bank on Thursday announced an increase in its Pandemic Emergency Purchase Programme by 600 billion euros.
Reference: Reuters, CNBC
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