Global Stocks Traded Lower, As Signs Of The Coronavirus Pandemic’s Impact On Jobs And Business Activity Weighed On Markets

Futures tied to the S&P 500 ticked down 0.3%, suggesting the blue-chip index may slip after a volatile day of trading on Thursday. European stocks fell, pushing the Stoxx Europe 600 down 1.3%.

In Asia, Japan’s Nikkei 225 closed 0.9% lower, while South Korea’s Kospi Composite eased 1.3%. China’s benchmark Shanghai Composite fell 1.1% and Hong Kong’s Hang Seng Index lost 0.4%. The exception was Australia, where the S&P/ASX 200 rose 0.5%.

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The Nikkei retreated 3.2% on the week, its first pullback in three weeks, while the S&P/ASX 200 shed about 4.5%, its first such decline in five weeks, and the Kospi Composite fell 1.3%. Benchmarks in Hong Kong and Shanghai were also on track to post weekly drops for the first time in several weeks.

U.S. stocks had a turbulent session Thursday, closing flat after early gains were wiped out by reports of a setback for a key drug to treat Covid-19.

“The market has been getting its head around how much permanent damage is to be brought by the virus. And the latest figure tells us the U.S. labor market is in a bloodbath,” said Govinda Finn, an economist at Aberdeen Standard Investments.

Data published Thursday showed about 4.4 million Americans sought unemployment benefits last week, bringing the total claims for the past five weeks to more than 26 million.

Separate figures showed business activity, as measured by surveys of purchasing managers, plunged in the U.S., Europe and Japan.

Mr. Finn said his institution projected U.S. unemployment would peak at 19% by the middle of this year, as the pandemic was battering the economy much more quickly than the global financial crisis.

Layoffs directly hit consumption and social distancing was also discouraging spending. The size and persistence of the shock will cause some permanent scarring to the U.S. economy, with consumption accounting for roughly 70% of gross domestic product, he said.

Zheng Fang, chief investment officer at Keywise Capital Management, a Hong Kong-based hedge fund, said after recent rallies, neither earnings nor the progress with coronavirus treatments justified further gains in U.S. or mainland Chinese stocks.

The yield on the 10-year U.S. Treasury note slipped to 0.589% from 0.613% Thursday. Yields move in the opposite direction to bond prices.

Oil prices extended a rebound that began Wednesday. U.S. crude-oil futures for June delivery added 1.9% to $16.82 a barrel. Brent crude, the global gauge, rose 1.7% to $25.20.

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