GLOBAL equities were mixed yesterday as markets mulled over how emerging signs of economic weakness will affect interest rate policies.

Analysts cited data showing a drop in US job openings as the latest indication of cooling in the world’s biggest economy – following weak manufacturing numbers on Monday.

Investors also took note of a concerning shareholder letter from JPMorgan Chase chief executive Jamie Dimon, who warned the banking crisis “is not yet over” and said inflation could linger at high levels, extending the period of higher interest rates.

However, the yield on the 10-year US Treasury note, a proxy for Federal Reserve policy, fell decisively.

“The time for pause and consideration may have arrived,” Craig Erlam, senior market analyst at brokerage firm Oanda, said.

“We may see most now proceed with caution and only tighten if absolutely necessary.”

Following a mixed day on European and Asian equity markets, US stocks opened near flat but later weakened.

The S&P 500 ended 0.6% lower with industrial and financial shares among the hardest-hit.

“The stock market did not respond favourably to the drop in yields due to the sense that a weakening economic backdrop will translate to further cuts in earnings estimates,” Briefing.com said.

Market watchers said the media focus on former US president Donald Trump’s pleading in a state criminal proceeding probably crimped trading volumes but did not affect the market’s trajectory.

“While it is historic and likely has a lot of eyeballs on it, it’s very difficult to draw a direct economic impact,” Art Hogan, an analyst at B. Riley Financial, said of the proceedings.

Elsewhere, the pound reached a 10-month high against the dollar on recent strong UK data, bolstering expectations that the Bank of England would continue to raise interest rates to cool sky-high inflation.

The uncertain outlook spurred demand for gold, which set a high for the year by rising 2% to US$2,040 (RM8,980), “supported by renewed weakness in bond yields and US dollar,” market analyst Fawad Razaqzada at Stone X said. – AFP, April 5, 2023.