US stocks inch towards record highs

August 13, 2020: US stocks inched towards record highs on Thursday following a drop in first-time unemployment claims and indications US lawmakers are still seeking common ground on an economic rescue package.

Data showed new weekly claims for unemployment benefits fell below one million for the first time since the coronavirus pandemic struck in March.

The 963,000 seasonally adjusted initial claims filed in the week ended August 8 came in below expectations.

"US stocks edged closer to record high territory after jobless claims fell below the 1 million level for the first time since March and after House Speaker (Nancy) Pelosi signalled she is willing to negotiate, offering they restart talks with a $2 trillion stimulus package and that they negotiate how to spend it," said market analyst Edward Moya at online currency trading firm Oanda.

While the Dow was down in late morning trading, both the broader S&P 500 and tech-heavy Nasdaq Composite advanced modestly to near record highs.

Europe's main stock markets failed to get any traction from the US jobs data and ended lower.

Traders have been betting on US lawmakers eventually agreeing on a new pandemic recovery deal despite long-running animosity between Democrats and Republicans.

Both sides are blaming each other for the lack of movement, with Treasury Secretary Steven Mnuchin saying Wednesday that House Leader Pelosi would not budge unless a Democrat demand for spending of at least $2 trillion is met.

That is well down from the $3.5 trillion initially proposed by Democrats but Republicans say they are unwilling to shift from their $1-trillion plan.

- US-China talks -

There is also a focus on this weekend's US-China talks to review their trade pact signed in January.

There have been concerns that rising tensions between the superpowers could scupper the agreement, which ended, or at least called a truce in a painful and long-running trade war that battered the global economy.

But top officials on both sides have expressed confidence the deal will be kept in place and analysts said there was little desire from either side to scrap it.

"From the US perspective, imposing more trade taxes on US companies in the middle of a pandemic would generally be considered a bad thing for the stock market," said Stephen Innes at AxiCorp.

"After touting the stock market's miraculous recovery... (US President Donald) Trump would be vehemently against anything that would trigger a drop in stocks," he added.

"From China's perspective, (President) Xi probably wants to keep US relations on good terms, given the strong likelihood of a change in the US administration with Democrats polling well."

Earlier in Asia, investors had struggled to maintain momentum following a strong start.

Oil prices edged lower, as the International Energy Agency cut its 2020 forecast for global oil demand to 91.9 million barrels per day, the first downgrade in a number of months.

"By December 2021, global oil consumption will still be two percent lower than at the end of 2019," the IEA said.

- Key figures around 1530 GMT -

• London - FTSE 100: DOWN 1.5 percent at 6,185.62 points (close)
• Frankfurt - DAX 30: DOWN 0.5 percent at 12,993.71 (close)
• Paris - CAC 40: DOWN 0.6 percent at 5,042.38 (close)
• EURO STOXX 50: DOWN 0.6 percent at 3,342.85
• New York - Dow: DOWN 0.2 percent at 27,934.84
• Tokyo: Nikkei 225: UP 1.8 percent at 23,249.61 (close)
• Hong Kong: Hang Seng: DOWN 0.1 percent at 25,230.67 (close)
• Shanghai: Composite: FLAT at 3,320.73 (close)
• Euro/dollar: UP at $1.1830 from $1.1791 at 2040 GMT
• Pound/dollar: UP at $1.3085 from $1.3026
• Euro/pound: DOWN at 90.42 pence from 90.48 pence
• Dollar/yen: UP at 106.90 yen from 106.86 yen
• West Texas Intermediate: DOWN 0.6 percent at $42.41 per barrel
• Brent North Sea crude: DOWN 0.6 percent at $45.17 per barrel

AFP/APP