U.S. Stock Futures Pare Drop After Jobless Data: Markets Wrap

(Bloomberg) -- U.S. equity futures trimmed a decline on Thursday as weekly unemployment data in the world’s largest economy matched expectations and amid simmering tension between America and China. Treasuries edged higher and the dollar fluctuated.

Contracts on the three main U.S. equity gauges pared some of their losses after figures revealed another 2.44 million Americans claiming jobless benefits, in line with expectations for about 2.4 million new applicants. Futures are on the back foot after the Senate overwhelmingly passed a bill that could bar some Chinese companies from listing on U.S. exchanges. President Donald Trump stoked tensions by tweeting criticism of Xi Jinping’s leadership, days before the biggest Chinese political gathering of the year.

Most Asian shares dipped along with the yuan in offshore trading. The Stoxx Europe 600 Index fell, with nearly all 19 sector groups in the red. Deutsche Lufthansa AG shares bucked the trend after the carrier said it was close to a multibillion-euro bailout deal from the German government.

Concern over the stress between the U.S. and China and global coronavirus cases reaching 5 million are vying for investor attention with optimism over reopening economies and progress on thwarting the pandemic. AstraZeneca Plc received more than $1 billion in American funding to develop a Covid-19 vaccine. Meanwhile, the U.S. legislation could lead to Chinese mega-companies such as Alibaba Group Holding Ltd. and Baidu Inc. being barred from exchanges. Both slipped in early trading.

“Markets may be pricing in far too much complacency as the U.S.-China ‘phase one’ trade deal could be at risk,” said Stephen Innes, chief global market strategist at AxiCorp. “The pandemic and resulting acute economic downturn have made China’s trade commitment to the U.S. much more challenging to fulfill.”

The fresh jobless data has once again underscored the economic hit from the virus. The latest jump in claimants takes the number of newly unemployed since the crisis began nine weeks ago to almost 40 million.

Elsewhere, crude oil climbed for a sixth day after a drop in U.S. stockpiles.

These are the moves across major assets:

Stocks

• Futures on the S&P 500 Index dipped 0.2% as of 8:39 a.m. New York time.
• The Stoxx Europe 600 Index fell 0.4%.
• The MSCI Asia Pacific Index declined 0.3%.
• The MSCI Emerging Market Index climbed 0.1%.

Currencies

• The Bloomberg Dollar Spot Index dipped 0.1%.
• The euro jumped 0.2% to $1.1007.
• The British pound was little changed at $1.2243.
• The onshore yuan weakened 0.2% to 7.105 per dollar.
• The Japanese yen weakened 0.1% to 107.66 per dollar.

Bonds

• The yield on 10-year Treasuries fell one basis point to 0.67%.
• The yield on two-year Treasuries climbed less than one basis point to 0.17%.
• Germany’s 10-year yield fell one basis point to -0.48%.
• Britain’s 10-year yield dipped three basis points to 0.196%.
• Japan’s 10-year yield dipped one basis point to 0.001%.

Commodities

• West Texas Intermediate crude gained 3.3% to $34.60 a barrel.
• Brent crude increased 3% to $36.83 a barrel.
• Gold weakened 0.5% to $1,739.50 an ounce.

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