World stock markets stalled at two-week highs and oil prices fell on Thursday as increased restrictions in parts of the world to contain the spread of the Omicron COVID-19 variant tempered investor optimism about the economic recovery.
European shares closed lower after opening higher, while stocks on Wall Street were mostly in the red and Japan’s blue-chip Nikkei stock index slipped almost half a percent.
That left MSCI’s world stock index hovering near two-week highs but struggling to make much headway after three days of solid gains. It has risen more than 3% this week and is set for its biggest weekly rise since early February.
U.S. Treasury yields retreated following three straight days of gains for the benchmark 10-year note after data again showed a tight U.S. labor market ahead of a key inflation reading on Friday that could influence Federal Reserve policy-making.
Even if the year-over-year consumer price index gain comes in less than the expected 6.8%, the Fed will not back off plans to quicken the tapering of its bond-buying program, said Marc Chandler, chief market strategist at Bannockburn Global Forex.
“The Fed has made its pivot,” he said. “The labor market is strong enough and has enough momentum to take care of itself and now it’s got to turn our attention back to inflation.”
The number of Americans filing new claims for unemployment benefits dropped to the lowest level in more than 52 years last week as labor market conditions tightened further amid an acute shortage of workers, the Labor Department said.
The yield on 10-year Treasury note fell below 1.5%, down 1.8 basis points to 1.491%.
The dollar edged higher against a basket of currencies as a warning from the International Monetary Fund‘s chief economist added to concerns about Omicron and tempered the appetite for currencies and other assets considered “risky.”
The pandemic could turn out far more costly than estimated, but central banks do not have the space to keep monetary policy loose and interest rates low as inflationary pressures build, the IMF’s Gita Gopinath https://www.reuters.com/business/imf-chief-economist-sees-inflationary-pressures-2021-12-09 said in Geneva.
Deputy Governor Toni Gravelle of the Bank of Canada said there is a risk Omicron could hold back services consumption and exacerbate supply constraint issues.
Britain announced tougher COVID-19 restrictions on Wednesday.
The dollar index, which tracks the greenback versus a basket of six currencies, rose 0.27% to 96.214. The euro fell 0.42% to $1.1294 and the yen slid 0.21% to $113.42.
On Wall Street, the Dow Industrials tried rebound for much of the session but closed essentially flat. The S&P 500 fell 0.72% and the Nasdaq Composite lost 1.71%.
Healthcare and consumer staples were the only two of the 11 S&P sectors to gain.
MSCI’s all-country world index closed down 0.60% and the broad STOXX Europe 600 index fell 0.08%, but emerging markets stocks rose 0.54%.
Oil prices fell after measures by some governments to slow the spread of Omicron, while a ratings downgrade for two Chineseproperty developers stoked fears over the economic health of the world’s biggest oil importer.
Developers China Evergrande and Kaisa https://www.reuters.com/business/chinas-kaisa-kicks-off-12-bln-debt-restructuring-after-missing-pay-date-source-2021-12-09 were downgraded to “restricted default” by rating agency Fitch due to non-payment of offshore bonds. A source said Kaisa had started work on restructuring its $12 billion offshore debt.
Hopes for monetary easing in China after a cut to banks’ reserves ratio this week and fairly benign inflation figures on Thursday lifted Chinese shares and Asian shares outside Japan, which rose 0.6% to a two-week peak.
China’s blue chip CSI300 index rose 1.7% and has gained 3.6% for the week so far. [.SS]
Brent crude futures settled down $1.40 at $74.42 a barrel, while U.S. crude also fell $1.42 to settle at $70.94 a barrel.
Gold slipped as the dollar firmed. U.S. gold futures settled down 0.5% at $1,776.70 an ounce.
Bitcoin fell 5.70% to $47,645.13.
(Reporting by Herbert Lash; Additional reporting by Dhara Ranasinghe in London and Tom Westbrook in Sydney; Editing by Dan Grebler, Cynthia Osterman and Lisa Shumaker)
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
