Equities mixed as US jobs market tightens

FE Team | Published: May 05, 2018 00:43:31

LONDON, May 4 (AFP): US stocks slid on Friday after US jobs data showed a further tightening in the labour market and raised questions about the resilience of the economy while European markets were mixed.
"US stocks are lower in early action, with a softer-than-expected April nonfarm payroll report exacerbating recently flared-up economic momentum concerns and offsetting the implications that the Fed may not be forced to speed up its tightening campaign," said analysts at Charles Schwab brokerage.
The Dow slid 0.4 percent at the opening bell.
In afternoon trading, London rose 0.4 percent while Frankfurt added 0.3 percent. Paris stocks dipped 0.1 percent.
"Global trade uncertainty is also lingering as the US and China wrapped up another round of talks with little accomplished," the Charles Schwab analysts wrote.
US employers added a net 164,000 new positions for the month, according to the Labor Department, fewer than the 190,000 analysts were expecting.
Meanwhile the unemployment rate fell to 3.9 percent, the lowest since December 2000, suggesting that employers are finding it harder to find workers.
But the jobs report showed modest wage pressures, with average hourly earnings up only 0.2 percent for the month, in line with analyst expectations.
With the Federal Reserve looking for signs of rising prices and wages to hike interest rates, the report did not provide a strong signal for a quick rise in rates.
Rising interest rates on government bonds in recent weeks has tempered investor appetite for stocks.
But the low job creation figure was not comforting either amid rising concerns of a slowdown due to possible trade wars triggered by President Donald Trump as he seeks to improve the US's terms of trade.
Meanwhile, in Beijing, the biggest hitters in Donald Trump's administration met their Chinese counterparts for a second day of high-stakes trade talks on Friday.
The Chinese government said the talks ended with "big differences", leaving the world's two largest economies on the brink of a trade war that could have knock-on effects on the global economy.
Treasury Secretary Steven Mnuchin and top White House economic adviser Peter Navarro, a prominent China critic, led the US delegation.
Xi Jinping's top economic adviser Vice Premier Liu He led the talks for China.
"Both sides recognise there are still big differences on some issues and that they need to continue to step up their work to make progress," Beijing said in a statement released by the official Xinhua state news agency.
The talks were aimed at forestalling a looming conflict, with both sides prepared to pull the trigger on tariffs that could affect trade in billions of dollars of goods.
Oil markets are also awaiting Trump's decision on the Iran nuclear deal, with speculation rife that he will tear it up.
Many fear that option could spark geopolitical turmoil and put fresh upside pressure on crude prices.
Both main contracts are sitting around levels not seen since late 2014, though data showing rising US production and stockpiles is tempering gains.
In European trading, shares in Societe Generale tumbled 7.0 percent to 41.74 euros after the French bank posted weak profits.
On the upside, shares in British-Airways parent IAG jumped 5.4 percent to 675.40 pence in London after it reported a 75-percent jump in operating profits for the first quarter.