U.S. stocks fluctuated and crude traded near a 12-year low today as the calming effects of China’s attempts to shore up financial markets faded, while treasuries headed for the biggest weekly advance in a month and the U.S. dollar strengthened.
Bloomberg News reports global shares retreated for a fifth day, poised for their biggest weekly decline since September 2011, as oil hovered around $33 a barrel. Health care and energy producers led declines among U.S. equities, which are mired in the worst start to a year on record. European stocks capped the worst week in more than four years even as Chinese authorities moved to stabilize the yuan and quell turmoil in financial markets.
Volatility in Chinese markets spurred a global selloff in riskier assets as concern deepened over the ruling Communist Party’s ability to manage an economic slowdown. U.S. payroll growth surged in December, capping the second-best year for American workers since 1999. While that was further evidence of a resilient job market that prompted the Federal Reserve to raise interest rates, wages grew slower than forecast, adding to disinflation concerns stoked by plunging commodities prices.
“There will remain some jitters about China until they get get through a week or more without having a precipitous drop,” says Peter Jankovskis, who helps oversee $1.9 billion as co-chief investment officer of Lisle, Illinois-based OakBrook Investments. “Given what’s going on in China right now, the market is looking for economic growth and evidence that there’s strength in the U.S. economy. We’re still walking on egg shells, but this is definitely going to help turn a corner.”
