Singapore market trends Friday: US jobless claims drop, suggesting Fed will stay the course

Singapore street scene in Tanjong Pagar neighborhood; taken 31 August 2018.Singapore’s Tanjong Pagar neighborhood.

Singapore shares face the last session of the week with mixed signals, as signs of continued strength in the U.S. economy may be offset by a mediocre performance on Wall Street on Thursday.

As the year nears its end, more traders are likely to be heading to the sidelines as they move into vacation mode or take compliance leave.

In the U.S., jobless claims data showed the U.S. jobs market remained tight, with filings for unemployment benefits dropping to a lower-than-expected 206,000 in the week ended 8 December.

“Jobless claims fell back to Earth this week showing the labor market’s strength is not fading,” Chris Rupkey, chief financial economist at MUFG Union Bank, said in a note on Thursday.

“Not that anyone’s watching all that closely, but markets can breathe a sigh of relief that the economy is not going all wobbly. China is slowing, trade tensions are still smoldering, stock markets have fallen sharply, but none of these risks rise to the point where companies actually start to lay off workers,” Rupkey said.

He added that the data show the U.S. Federal Reserve was right to continue raising interest rates at its upcoming meeting.

“There is no need for the Federal Reserve to still be ladling punch out to one of the longest economic expansions in history,” Rupkey said.

Indexes

January futures for Japan’s Nikkei 225 were down 40 points at 21,685 at 8:00 A.M. SGT, and December futures were flat at 21,715 at 7:45 A.M. SGT, compared with the index’s previous close at 21,816.19.

Singapore’s Straits Times Index was up 0.36 percent at 3111.08 at Thursday’s close; December futures for the index were at 3107 on Thursday, while January and February futures were at 3110 and 3112 respectively, according to SGX data.

Hong Kong’s Hang Seng Index was up 1.29 percent at 26,524.35 on Thursday, while China’s CSI 300 gained 1.55 percent to 3219.692.

Malaysia’s KLCI index added 0.77 percent to 1676.00 on Thursday, while Indonesia’s IDX Composite tacked on 1.02 percent to 6177.72.

The Dow Jones Industrial Average added 0.29 percent to 24,597.39, the Nasdaq Composite shed 0.39 percent to 7070.334, and the S&P 500 nudged down 0.02 percent to 2650.54. Futures for the three indexes were nearly flat in early trade.

Oil

Nymex WTI crude oil futures for January were up 0.49 percent at US$52.84 a barrel at 7:29 A.M. SGT, while ICE Brent crude futures for February were up 2.16 percent at US$61.45 a barrel at 6:58 A.M. SGT, according to Bloomberg data.

Get the Shenton Wire morning briefing in your inbox