Equities climb after huge NFP miss
Friday saw a massive miss on Non-Farm Payrolls, which managed to rise by only 266,000 jobs. However, this is quickly being dismissed as an anomaly, as stock markets rallied. Clearly, investor optimism was not shaken despite the soft job numbers.
Asia is off to a positive start today, with frantic rallies in commodity prices today and a positive finish from Wall Street last week, heating up the global recovery sentiment. S&P 500, Nasdaq, and Dow Jones futures have added around 0.20% this morning, adding to their strong Friday finish, as the low-ball Non-Farm Payrolls eased taper tension from the Fed.
In Asia, the Nikkei 225 is 0.80% higher, with the Kospi leaping by 1.40%. Those jumps in iron ore and rebar prices in China today are muting the gains there, as is a firmer CNY fixing by the PBOC. Nevertheless, the Shanghai Composite has risen 0.20%, while the CSI 300 has edged 0.10% higher with the Hang Seng down 0.20%.
More community cases of Covid-19 are weighing on Singapore, with the Straits Times down 0.50%, while movement control orders have left Kuala Lumpur unchanged. Jakarta has risen 0.55%, with Taipei flat, Manila 0.85% higher and Bangkok increasing 0.50%. Australian markets are, unsurprisingly, higher today after the moves in iron ore prices this morning, and yet more positive economic data. The ASX 200 has jumped 0.90%, with the All Ordinaries rallying by 1.0%.
Like Singapore, Japan, Thailand, and most of the peripheral ASEAN, Malaysia is dealing with a new wave of surging cases, with only Indonesia seemingly dodging the bullet. If the reaction in Singapore markets is anything to go by vis-a-vis new restrictions, Malaysian equities will struggle ahead of the end of Ramadan holidays this week.
If equity markets could shrug off the Non-Farm Payroll shocker last Friday, it is hard to see the global recovery narrative coming under pressure this week. Although day-to-day nuances in sentiment will ebb and flow, and a thinner calendar increases headline risk, equities should broadly finish the week higher.
