Global Selloff Continues as US Jobs Data Lift Yields and the Dollar

Yesterday’s technology selloff continued through Asia Pacific trading overnight and into Europe this morning, where disappointing retail sales data have also weighed on sentiment. US index futures are mixed, with technology shares attempting a rebound, although the durability of that recovery remains uncertain. Oil prices remain in the $90s following this week’s pullback as traders assess whether the US may renew attacks against Iran or pursue a negotiated settlement following the midterm elections. Stronger-than-expected US job creation has Treasury yields and the US Dollar climbing.

US nonfarm payrolls rose 165K versus 70K expected, although the previous month’s gain was revised down to 29K from 60K. Average hourly earnings increased 3.1% versus 2.9% expected, suggesting wage-related inflation pressures remain a consideration. Canada lost 5K jobs versus an expected 15K increase, with a 13K gain in part-time employment outweighed by an 18K decline in full-time positions. Eurozone retail sales growth slowed to 0.4%, below 0.6% expected and the previous 1.3%. In earnings, Bombardier ($1.72 vs street $1.64) beat expectations, while Cineplex ($0.24 vs street $0.30) and Telus ($0.11 vs street $0.12) fell short. Airbnb ($3.16 vs street $2.85) beat expectations and is up 14.0% in premarket trading. Constellation Software* reports later today.

NASDAQ futures are up 1.5%, while Dow futures are down 0.9%.

In Asia, the Nikkei and KOSPI each fell 6.0%, while the Hang Seng declined 1.3%. In Europe, the DAX is down 2.3% and the FTSE is down 2.0%.

Crude Oil is up 0.3%, regaining $90.00/bbl, while Brent Crude is up 0.1%, trading back above $97.50/bbl. Gasoline is down 0.2%, near $2.75/gallon. Gold is down 1.0%, falling back below $4,100/oz, while Silver is down 0.3%. Copper is up 0.2%, near $6.25/lb. US 10-year and 30-year Treasury yields are climbing towards 4.90% and 5.30%, respectively. The US Dollar Index is up 0.6%, while the Euro is down 0.6% and the Loonie is down 0.5%.

*Shares of Constellation Software are held in some portfolios managed by SIA Wealth Management.

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