Gossip
BEIJING — Global stock markets were mostly higher Friday ahead of a U.S. jobs update amid worries about the health of banks under pressure from interest rate hikes.
London, Frankfurt, Hong Kong and Wall Street futures advanced. Shanghai declined. Markets in Japan and South Korea were closed for holidays. Oil prices advanced.
The U.S. government was due to report April employment data that are expected to show a slowdown in job growth. Investors hope more signs the economy is weakening might prompt the Federal Reserve to call off possible additional rate hikes to cool inflation.
“We estimate a slowdown in net job growth and tick up in the unemployment rate,” said Rubeela Farooqi of High Frequency Economics in a report.
In early trading, the FTSE 100 in London rose 0.4% to 7,733.23. The DAX in Frankfurt gained 0.3% to 15,785.07 and the CAC 40 in Paris added 0.4% to 7,368.51.
On Wall Street, the future for the benchmark S&P 500 index was up 0.3%. That for the Dow Jones Industrial Average rose 0.1%.
On Thursday, the S&P 500 index lost 0.7% as investors worried about the health of banks following three high-profile failures in the United States and one in Switzerland. The Dow dropped 0.9% and the Nasdaq fell 0.5%.
Shares of PacWest Bancorp, a target of investor scrutiny, tumbled 50.6%. The bank said it was considering options and has been approached by potential partners and investors.
Investors want to know steps authorities might take to “limit further contagion risks,” Yeap Jun Rong of IG said in a report. “Any inaction over the weekend could translate to a more downbeat risk environment to start next week.”
In Asia, the Shanghai Composite Index lost 0.5% to 3,334.50 while the Hang Seng in Hong Kong gained 0.5% to 20,049.31. Sydney’s S&P-ASX 200 rose 0.4% to 7,220.00.
India’s Sensex sank 0.8% to 61,261.70. New Zealand and Southeast Asian markets declined.
Rate hikes by the Fed and other central banks in Europe and Asia have put pressure on banks by causing the market prices of bonds on their books to decline. Investors worry depositors might pull money out of lenders that are thought to be troubled, worsening their financial pressures.
On Wednesday, the Fed raised its key overnight rate to a range of 5% to 5.25% from close to zero early last year.
Shares of Western Alliance Bancorp plunged as much as 61% on Thursday after The Financial Times said the Phoenix-based bank was considering selling its business. The company denied the report. Its stock ended the day down 38.5%.
This week, regulators seized First Republic Bank and sold most of it to JPMorgan Chase.
Officials say the banking system is sound and secure, but investors worry.
Traders expect at least a brief U.S. recession this year. They expect the Fed to start cutting rates in the second half of the year to prop up economic growth, though chair Jerome Powell said this week he doesn’t see cuts coming so early.
A report Thursday showed the number of U.S. workers filing for unemployment last week accelerated a bit more than expected.
The Fed indicated Wednesday it might be finished with rate hikes for now, but the president of the European Central Bank, Christine Lagarde, on Thursday said, “we are not pausing.” The ECB announced another rate hike but by a smaller margin of one-quarter percentage point.
Helping to support stocks despite all the worries has been a largely better-than-feared earnings reporting season.
Companies in the S&P 500 are still on track to report a second straight quarter of profit drops, but the results have mostly been better than expected.
In energy markets, benchmark U.S. crude rose 71 cents to $69.27 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 4 cents on Thursday to $68.56. Brent crude, the price basis for international oil trading, added 79 cents to $73.29 per barrel in London. It advanced 17 cents the previous session to $72.50.
The dollar declined to 134.02 yen from Thursday’s 134.14 yen. The euro gained to $1.1026 from $1.1016.
