US equity indices edged higher, as Nasdaq (+1.06%) rallied to a new record on Thursday, on concerns that the Covid-19 environment would last longer and maintain the strong demand in tech and online services.
China’s e-commerce giant Alibaba announced better-than-expected second quarter results, with 34% rise in sales growth, a touch lower than the pre-pandemic quarter, where the performance was boosted by China’s most popular Single’s Day shopping festival. The strong numbers hinted at a decent recovery in Chinese consumer demand and boosted appetite in Chinese equities. Shanghai’s Composite gained 0.78% as the CSI 300 (+1.17%) advanced despite uncertain trade relations with the US.
On the trade front, the latest reports suggest that the US oil exports to China should approach record high levels in September as a sign that China works hard towards meeting its phase-one commitments. Chinese and US officials are due to meet soon to review the existing trade deal, but there is not an exact date yet. For now, China remains resilient to US attacks to avoid worsening the situation and disturbing the market, but given the US’ aggressive approach, the outcome of an eventual meeting, if any, seems unpredictable. But investors have low expectations regarding the upcoming US-China talks. Therefore, any good news could give a positive spin to the market sentiment.
Data-wise, the US new jobless claims rose above a million last week. The existing claims fell a touch below the 15 million mark, but the broader picture remains gloomy as the pandemic continues weighing on businesses. The IRS estimates 37.2 million fewer jobs in 2021 compared to their forecast a year earlier.
