HONG KONG (AP) — World shares were mostly higher Monday following strong gains on Wall Street after the U.S. jobless rate hit an 18-year low, helping investors overlook unresolved trade tensions between Washington and Beijing.
KEEPING SCORE: European shares rose in early trading. Germany’s DAX rose 0.4 percent to 12,866.38 and Britain’s FTSE 100 climbed 0.9 percent to 7,567.14. France’s CAC 40 edged up less than 0.1 percent to 5,517.49, as a plunge in Air France shares over its latest strike weighed on sentiment. Wall Street was poised to open higher. Dow futures added 0.2 percent to 24,283.00 and broader S&P 500 futures gained 0.3 percent to 2,670.50.
ASIA’S DAY: Japan’s benchmark Nikkei 225 index dipped less than 0.1 percent to close at 22,457.16 but Hong Kong’s Hang Seng index rose 0.2 percent to 29,994.26. The Shanghai Composite index in mainland China jumped 1.5 percent to 3,136.64 and Australia’s S&P/ASX 200 climbed 0.4 percent to 6,084.50. Taiwan’s benchmark rose but Southeast Asian indexes were mostly lower. South Korean markets were closed for a holiday.
U.S. JOB MARKET: The latest monthly jobs report showed that U.S. hiring continued at a solid clip and wages grew modestly, a sign the world’s biggest economy remains resilient despite concerns about trade conflicts with China. U.S. government figures showed that employers added 164,000 jobs in April, making it the 91st straight month of hiring growth, and the unemployment rate fell to 3.9 percent, the lowest level since December 2000.
TRADE DEMANDS: Tensions persist after talks in Beijing ended Friday without any agreement. The Trump administration asked China to cut its trade deficit by $200 billion by the end of 2020, stop providing subsidies to key industries and end some policies related to technology transfers, a main issue behind the dispute. China presented its own concerns, seeking U.S. help with protection of intellectual property and with exports of technology deemed strategically sensitive.
QUOTEWORTHY: “The ongoing negotiations might have bought some time and eased tensions in the short run, but investors will remain alert for another round of trade threats,” said Hussein Sayed, chief strategist at FXTM. “Markets will closely scrutinize any statement from President Trump on this front.”
AIR FRANCE STRIKE: The airline’s shares plunged 12 percent after workers went on strike, resulting in the cancellation of about 15 percent of flights worldwide. France’s finance minister warned that the government would not come to the airline’s rescue and that its survival is at stake.
ENERGY: Oil futures advanced to their highest since November 2014. Benchmark U.S. crude rose 66 cents to $70.38 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 1.9 percent to settle at $69.72 per barrel on Friday. Brent crude, the international standard, gained 63 cents to $75.50 per barrel in London.
CURRENCIES: The dollar rose to 109.31 yen from 109.08 yen. The euro slipped to $1.1928 from $1.1960.
– Here are the top five things you need to know in financial markets on Monday, May 7:
1. U.S. Crude Tops $70 For First Time Since 2014
Crude prices started the week in an upbeat mood, reaching their strongest level in almost four years as traders increased their bets the U.S. would pull out the Iran nuclear deal, raising the potential for tighter global oil stockpiles.
The Trump administration has until May 12 to decide whether to pull the United States out of a 2015 international accord to curb Iran’s nuclear program and restore sanctions on one of the world’s biggest oil producers.
If sanctions are reinstated, that could contribute to tighter global oil inventories, as it would likely result in a reduction of Tehran’s oil exports.
Concerns over a deepening economic crisis in Venezuela, which has threatened the country’s already tumbling oil supplies was another factor supporting prices.
New York-traded WTI crude futures rose to an intraday peak of $70.69 a barrel, breaching the $70-mark for the first time since November 2014. It was last at $70.47, up 75 cents, or around 1.1%.
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., tacked on 69 cents, or 0.9%, to $75.56 a barrel, after climbing to $75.89 earlier in the session, its highest since November 2014.
2. U.S. Stock Futures Point To Positive Open
U.S. stock futures pointed to a positive open, as momentum from Friday’s tech rally looked set to continue.
The blue-chip Dow futures rose 60 points, or about 0.3%, the S&P 500 futures tacked on 8 points, or nearly 0.3%, while the tech-heavy Nasdaq 100 futures indicated a gain of 42 points, or roughly 0.6%.
U.S. stocks rallied on Friday, as shares of Apple (NASDAQ:AAPL) hit an all-time peak to lead the technology sector higher. The positive numbers on Friday, however, were not enough to offset weekly losses for the Dow and S&P 500, each down roughly 0.2%.
About 40 S&P 500 companies are due to report financial results this week, in what will be the last big wave of the first-quarter earnings season.
NVIDIA (NASDAQ:NVDA), Disney (NYSE:DIS), Groupon (NASDAQ:GRPN), Roku (NASDAQ:ROKU), Office Depot (NASDAQ:ODP), Marriott (NASDAQ:MAR), Electronic Arts (NASDAQ:EA), Wendy’s (NASDAQ:WEN), Etsy (NASDAQ:ETSY), Weibo (NASDAQ:WB), SINA (NASDAQ:SINA), JD.com (NASDAQ:JD), and A-B Inbev (NYSE:BUD) are among some of the names reporting this week.
Elsewhere, in Europe, the continent’s major bourses posted slight gains, as companies delivered strong earnings figures, while UK markets were closed for a public holiday, reducing activity.
Earlier, in Asia, markets in the region closed mostly higher, after U.S. stocks rallied Friday on a solid April jobs report.
3. Dollar Stays Near 2018 Highs
The dollar ticked higher against a basket of currencies, staying near its 2018 peak after U.S. jobs and wages data did little to temper perceptions of strength in the U.S. economy.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up around 0.2% at 92.61, not from Friday’s high of 92.75, its strongest level since late December.
The dollar was trading at 109.35 against the yen, nearing its three-month high of 110.05 touched last week.
Demand for the dollar continued to be underpinned by bets that the Federal Reserve will continue raising rates while other central banks, including the European Central Bank and the Bank of England, will act more slowly as recent economic figures there suggest cooling momentum.
4. Fed Speakers Eyed For Rate Hikes Hints
Markets will pay close attention to comments from several Fed speakers today for their views on inflation trends as traders watch for clues on the pace of future rate hikes this year
Atlanta Fed boss Raphael Bostic will deliver opening remarks at the Federal Reserve Bank of Atlanta’s 23rd Annual Financial Markets Conference, in Florida at 8:25AM ET (1225GMT).
Richmond Fed President Thomas Barkin is due to speak at George Mason University in Virginia at 2PM ET (1800GMT).
The Fed kept interest rates unchanged following its policy meeting last week, a move that was widely expected, and noted that inflation was starting to inch higher, leaving it on track to raise borrowing costs in June.
The U.S. central bank currently forecasts two more rate hikes in 2018, although market expectations of a third move higher before the end of the year has been gaining momentum in recent weeks amid strengthening inflation prospects.
5. NAFTA Talks Resume
Ministers from the United States, Canada and Mexico will gather again in Washington on Monday to begin what government officials and industry leaders hope is the final leg of negotiations over the North American Free Trade Agreement (NAFTA).
Discussions will center on rules of origin that govern what percentage of a car needs to be built in the NAFTA region to avoid tariffs, the dispute-resolution mechanism and U.S. demands for a sunset clause that could automatically kill the trade deal after five years.
Sources close to the talks have suggested there is a creeping feeling of uncertainty and pessimism going into the new round because of gridlock on the most critical issues.