Wall Street closed higher on Friday, buoyed by a better-than-expected US jobs report and a rebound in Tesla Motors shares, although concern about the Federal Reserve's rates policy remained.
The Labour Department reported on Friday that the American economy added 139,000 jobs in May, slower than previous months but beating analyst estimates, with the unemployment rate holding steady at 4.2 per cent.
It also indicated that wages grew at a solid pace, which may mean the Fed is unlikely to cut interest rates – something that US President Donald Trump has demanded from the US central bank.
Mr Trump on Thursday increased the pressure on Fed chairman Jerome Powell, urging him to cut interest rates by a full percentage point.
Mr Powell so far has resisted the calls from the White House and maintains that policy decisions will be data dependent. He met Mr Trump at the White House last week and was firm that rate decisions will be made “as required by law”.
“The labour market’s resilience puts the Fed in a difficult spot: inflation pressures remain sticky and the cooling many expected simply hasn’t materialised in the data that matters most,” said Nigel Green, chief executive of Dubai-based financial services firm deVere Group.
“This report puts another nail in the coffin for any talk of rate cuts in the summer. The Fed has said time and again it needs to see weakness in the labour market to move. This isn’t weakness. It’s strength with staying power.”
Investors also continue to monitor the tariff situation between the US and China. After imposing substantial tit-for-tat levies on imports, the world's two biggest economies agreed to a detente on their trade war on May 12.
Talks appear to be progressing: Mr Trump on Thursday spoke with Chinese President Xi Jinping, and on Friday Mr Trump said trade officials from Washington and Beijing will meet in London on Monday to resume discussions.
“Investors couldn’t care less. Dips in equity markets are still seen as opportunities to buy cheaper. And while the data is fun to watch, it remains secondary to the blind bullishness,” said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank.
“That’s the takeaway from the post – April 2 rally: the world may be wobbling, but markets march on,” she added, referring to the day Mr Trump announced his sweeping global tariffs programme.
On Wall Street, the S&P 500 and Dow Jones Industrial Average both settled 1 per cent higher, while the tech-heavy Nasdaq Composite gained 1.2 per cent.
Tesla, whose stock plummeted 14 per cent on Thursday in response chief executive Elon Musk's escalating public feud with Mr Trump, rebounded to close 3.7 per cent higher. The Texas-based company's shares rose by as much as 6 per cent.
For the week, the S&P was up 1.5 per cent, the Dow added 1.2 per cent and the Nasdaq rose 2.2 per cent. Year-to-date, the indices are up 2 per cent, 0.5 per cent and 1.1 per cent, respectively.
In Europe, markets were mostly up after the US jobs report eased fears of an economic slowdown. London's FTSE 100 closed up 0.3 per cent, boosted by banking stocks.
Paris' CAC 40 added 0.2 per cent, while Frankfurt's DAX retreated 0.1 per cent.
Earlier in Asia, major indices were mixed, with Tokyo's Nikkei 225 adding 0.5 per cent, Hong Kong's Hang Seng index declining 0.5 per cent and the Shanghai Composite closing flat.
In commodities, oil prices jumped nearly 2 per cent on Friday to post their first weekly gain in three weeks amid hopes for a US-China deal on tariffs and the jobs report.
Brent rose 1.73 per cent to settle at $66.47 a barrel, while West Texas Intermediate closed 1.91 per cent higher at $64.58 a barrel.
Gold, meanwhile, fell more than 1 per cent on investor concerns that the US jobs report won't sway the Fed to cut rates soon.
The precious metal, a hedge against inflation, declined nearly 1.3 per cent to $3,311.70 an ounce.
MATCH INFO
Barcelona 5 (Lenglet 2', Vidal 29', Messi 34', 75', Suarez 77')
Valladolid 1 (Kiko 15')
Wicked: For Good
Director: Jon M Chu
Starring: Ariana Grande, Cynthia Erivo, Jonathan Bailey, Jeff Goldblum, Michelle Yeoh, Ethan Slater
Rating: 4/5
Scream%20VI
%3Cp%3E%3Cstrong%3EDirectors%3A%3C%2Fstrong%3E%20Matt%20Bettinelli-Olpin%20and%20Tyler%20Gillett%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%3C%2Fstrong%3E%20Melissa%20Barrera%2C%20Jasmin%20Savoy%20Brown%2C%20Jack%20Champion%2C%20Dermot%20Mulroney%2C%20Jenna%20Ortega%2C%20Hayden%20Panettiere%20and%20Courteney%20Cox%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%203%2F5%3C%2Fp%3E%0A
The biog
Siblings: five brothers and one sister
Education: Bachelors in Political Science at the University of Minnesota
Interests: Swimming, tennis and the gym
Favourite place: UAE
Favourite packet food on the trip: pasta primavera
What he did to pass the time during the trip: listen to audio books
More from Neighbourhood Watch:
Nayanthara: Beyond The Fairy Tale
Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni
Director: Amith Krishnan
Rating: 3.5/5
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The specs: Macan Turbo
Engine: Dual synchronous electric motors
Power: 639hp
Torque: 1,130Nm
Transmission: Single-speed automatic
Touring range: 591km
Price: From Dh412,500
On sale: Deliveries start in October
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
