Wall Street Close: US labour market in tatters, hopes for stimulus prop risk appatite

• The Dow Jones Industrial Average lost 69.55 points or 0.23%.
• The S&P500 fell 4.72 points or 0.13%.
• The Nasdaq Composite added 66.86 points or 0.54%.

Thursday was mixed for the benchmarks following a bounce from early lows scored due to the labour market data showing a jump in jobless claims.

The rebound came on hopes of stimulus after US Treasury Secretary Steven Mnuchin said talks between Republican and Democratic senators on COVID-19 relief were making “a lot of progress” with more discussions expected in the day.

Subsequently, the Dow Jones Industrial Average dropped 69.55 points, or 0.23%, to 29,999.26, the S&P500 shed 4.72 points, or 0.13%, to 3,668.1 and the Nasdaq Composite added d66.86 points, or 0.54%, to 12,405.81.

US data and the ECB

US stocks fell initially when weekly initial jobless claims data that spiked by 137,000 to a seasonally adjusted 853,000, well above expectations for 725,000 and the highest level since mid-September.

”Inflationary pressures are starting to become evident with a 0.2% lift in core inflation in November. This was driven by higher prices for accommodation, airfares, vehicle insurance, and hospital services. Household appliances are also becoming more expensive. Annual core inflation remains low at 1.6% and unchanged from the previous month,” analysts at ANZ bank explained. 

Earlier in the day, as expected the European Central Bank announced an expanded asset program. ”An additional €500bn of funding was agreed to bring the total stimulus package to €1.85 trillion, but says it will only deploy what is needed,” the analysts at ANZ Bank noted. 

”The emergency bond-buying programme known as PEPP will be extended nine months to March 2022. The TLTRO-III bank lending package will be extended 12 months to June 2022 and four additional longer-term refinancing operations (PELTRO’s) will be offered in 2021 to provide a liquidity backstop.”

Brexit in deadlock

Meanwhile, on the Brexit front, British Prime Minister Boris Johnson said on Thursday there was “a strong possibility” Britain and the EU would fail to strike a new trade deal.

He has, however, vowed to do whatever he can to avoid a tumultuous split in three weeks. The European Union and Britain have set a deadline of Sunday to find agreement and prevent a chaotic break.