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Markets sink as slower job growth, trade war fears spook investors

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Even an improving labor market can’t shake Wall Street’s worry over the Trump administration’s tariff bluster. All three major indices were sharply down Friday, with the Dow Jones losing 600 points by mid-afternoon as investors digested the day’s news.

Although the official unemployment rate remained at 4.1 percent, a broader unemployment measure continued to tick down, and wage gains increased, the Bureau of Labor Statistics reported a mere 103,000 jobs added in March.

“It was surprisingly low,” Andy Challenger, vice president at Challenger, Gray & Christmas. “It could be a sign of some tentativeness from employers,” he suggested.

An upward revision of February’s already-blockbuster 313,000 job growth figure to 326,000 wasn’t enough to cancel out a downward revision of January’s labor market report, with a net 50,000 fewer jobs added in 2018 than previously believed. Still, economists pointed out that the three-month average — considered a more reliable metric than any single month’s figure — came in at a robust 202,000 jobs per month.

“I think the tariff situation, the trade war of words is probably weighing much more heavily on the market than the jobs report. The jobs report was a disappointment but not a disaster,” said Dan North, chief economist at Euler Hermes North America. “I really think it’s second in importance compared to what’s going on with the proposed tariffs,” he said.

“Rising interest rates and the threat of trade wars are a recipe for very volatile markets,” said Mark Zandi, chief economist at Moody’s Analytics. “Valuations are high, and are vulnerable,” he said.

“The bad news is with all the other craziness going on with the tariff situation and how that may or may not materialize into more jobs domestically,” said Robert Eyler, a board member of Redwood Credit Union and economist at Sonoma State University. “Short of the tariffs situation, our economy looks pretty good.”

Other economists also warned that the longer President Donald Trump’s protectionist rhetoric and threats of tariffs rattle investors, the more likely it is that the resultant volatility will start to spill over into the Main Street economy, hurting consumer confidence and workers’ job prospects.

“Corporate America’s worry over a trade war-induced market selloff could slow the momentum of job growth, just as last year’s soaring stocks helped buoy employment.”

“Corporate America’s worry over a trade war-induced market selloff could slow the momentum of job growth, just as last year’s soaring stocks helped buoy employment.”

Guy Berger, chief economist at LinkedIn, said corporate America’s worry over a trade war-induced market selloff could slow the momentum of job growth, just as last year’s soaring stocks helped buoy employment.

“When equity prices go up, firms feel more confident,” he said. “It was a tailwind… there’s no doubt that it made a difference.”

Economists were divided on the significance of the 2.7 percent annualized gain in wage growth. It cheered market observers who have been concerned that stagnant pay has kept a wide swath of wage-earning Americans from sharing in the fruits of the economic recovery, but wasn’t so high as to spark inflationary fears — a worry that kicked off the current spate of market volatility two months earlier when January’s unexpectedly high wage growth caught investors by surprise.

“If this number had been 3 percent or higher, the market probably would’ve gotten hit pretty hard,” said Scott Wren, senior global equity strategist for Wells Fargo Investment Institute.

Traders view wage growth as a proxy for more broad-based inflation, he said, so a slow, incremental increase in wages would be likely to validate the Federal Reserve’s current rate-raising trajectory and lessen the chance of the central bank over-correcting and raising rates too quickly for the economy to absorb.

Others warn that investors have failed to adequately price in future wage growth, which could be a trigger for additional selling-off in the coming months.

“Markets are more sanguine about wage growth and inflation,” Zandi said. “I suspect there will be some catching up to do. That means there will be more volatility in markets going forward as investors adjust their expectations… They haven’t really fully internalized what’s going on here.”

“The growth at some point is something you have to pay for,” Eyler said.

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Brazil: 20 killed including an officer in police shootout with drug traffickers | World News

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At least 20 people, including a police officer, have died in a shootout with drug traffickers in Rio de Janeiro, according to local media.

The O Globo newspaper said two passengers on a metro train were also wounded in the shooting in Jacarezinho, a shanty town in northern Rio, Brazil.

The shootings, it said, happened during a police operation.

Police conduct an operation against alleged drug traffickers in the Jacarezinho favela of Rio de Janeiro, Brazil, Thursday, May 6, 2021. (AP Photo/Silvia Izquierdo)
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At least 20 people are reported to have lost their lives Pic: AP /Silvia Izquierdo

An O Globo tweet said witnesses reported “fear and violence” in the neighbourhood.

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Cutting human sources of methane would reduce global warming and improve human health – scientists | Climate News

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Cutting human sources of methane would be a quick win for the climate, according to a new United Nations report.

Roughly halving emissions of the greenhouse gas from human activity, often with existing, cost-effective solutions, would reduce the future rise in global temperatures by around 0.3C by the 2040s, it is claimed.

The analysis was carried out by the UN Environment Programme and the Climate and Clean Air Coalition (CCAC).

Scientists have hailed the strategy as a “win-win” because it would reduce global warming and simultaneously improve human health and the economy.

Levels of methane in the atmosphere have doubled since pre-industrial times.

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Agriculture accounts for 40% of methane emissions, largely from livestock

It is a potent greenhouse gas that is 10 times more powerful than carbon dioxide at trapping heat in the atmosphere.

According to the UN’s Global Methane Assessment, human activity results in around 380 million tonnes of methane being released into the atmosphere every year.

Agriculture accounts for 40% of the emissions, largely from livestock and rice cultivation, while another 32% comes from oil and gas extraction and coal mining.

The report says reducing the emissions by 45%, or 180 million tonnes a year, by 2030 is critical for limiting global heating to 1.5C, the point where the climate would become increasingly and significantly unstable.

Professor Drew Shindell, chair of the CCAC and one of the report authors, told Sky News: “It’s vital to tackle methane because it’s the strongest lever we have to reduce the rate of warming in the near term.

“And that warming rate is what’s leading to stronger hurricanes, more intense heatwaves, flooding, droughts all those consequences.

“Three tenths of a degree accounts for 70 billion lost hours of labour.

“That’s people working outside in places that can’t be air conditioned like agriculture and construction, so they are real costs to the economy, human wellbeing and more people dying from heat exposure.

“All these 10ths of a degree sound minor, but they’re not at all.”

The report says the target could be achieved with known solutions, many of which would pay for themselves within a few years.

They include reducing methane leaks from gas pipelines, better management of coal mines, eliminating organic waste from landfill and reducing meat consumption.

Reducing emissions would have a swift impact on global warming because the gas only survives in the atmosphere for around 10 years, whereas carbon dioxide stays there for several centuries.

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Method found to reduce methane from cows

Professor Grant Allen, professor of atmospheric physics at the University of Manchester, said: “This does not mean that cutting methane emissions alone can solve the warming problem.

“We must also continue to reduce carbon dioxide emissions to meet Paris Agreement targets and avoid dangerous warming.

“But it does mean that we can help to quickly slow the rate of global temperature increase and avoid some significant degree of warming in the near future.”

As well as warming the climate, methane results in increased ozone air pollution.

Meeting the 45% target for reduced emissions would prevent 255,000 premature deaths and 775,000 asthma-related hospital visits every year, the report concludes.

Professor Dave Reay, executive director of the Edinburgh Climate Change Institute, University of Edinburgh, said: “Seldom in the world of climate change action is there a solution so stuffed with win-wins.

“This blunt report makes clear that slashing emissions of methane – a powerful but short-lived greenhouse gas – will deliver large and rapid benefits for the climate, air quality, human health, agriculture, and the economy too.

“Meeting the Paris Climate Goals will need every climate action trick in the book. Cutting methane emissions should be on page 1.”

The Daily Climate Show
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The Daily Climate Show

Sky News has launched the first daily prime time news show dedicated to climate change.

The Daily Climate Show is broadcast at 6.30pm and 9.30pm Monday to Friday on Sky News, the Sky News website and app, on YouTube and Twitter.

Hosted by Anna Jones, it will follow Sky News correspondents as they investigate how global warming is changing our landscape and how we all live our lives.

The show will also highlight solutions to the crisis and show how small changes can make a big difference.

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What are your holiday options? COVID-19 infection and vaccination rates for tourism hotspots revealed | UK News

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The UK is set to relax restrictions for visiting a handful of countries under a new traffic light system.

Those returning to the UK from countries on the green list will not need to self-isolate for 10 days, while visitors to countries on the amber list will have to quarantine and get tested on their return.

Many European nations are doing all they can to can to attract tourists this summer. But for many Britons, a destination with a low infection rate might be the clincher.

The UK’s rapid vaccine rollout and the long winter lockdown means infection rates are lower here than many holiday destinations.

Portugal, which imposed a lockdown in January to curb what was then the world’s worst COVID-19 surge, also has a relatively low infection rate.

The country started lifting restrictions last month and has since reopened some schools, restaurant and cafe terraces, museums and hair salons.

But Greece, where a fifth of jobs and GDP depend on tourism, is battling one of Europe’s highest coronaviruslinked death rates.

Greece’s prime minister has blamed vaccine hesitancy among the elderly for the persistently high rates of death and hospitalisations.

Meanwhile, the country has said it will invite vaccinated Britons into the country without the need for tests, while Spain, Portugal and France have said they will offer similar in the coming weeks.

European nations are also speeding up their vaccinations ahead the summer travel season.

European Commission President Ursula von der Leyen has said the bloc has now administered 150 million doses.

She added: “A quarter of all Europeans have had their first dose.

“We’ll have enough doses for vaccinating 70% of EU adults in July.”

Spain, the most popular tourist destination for Britons prior to the pandemic, has varying infection rates throughout the country.

Some regions in northern Spain have restrictions on travel while others have reopened bars until 1am.

Mallorca, Menorca, Ibiza, and Formentera, which make up the Balearic Islands, have a relatively low level of infections compared to mainland Spain.

The Foreign Office has also said it was no longer advising against travel to the Canary Islands in Spain, which include Tenerife, Fuerteventura, Grand Canaria and Lanzarote.

The US, also among the most visited by British tourists prior to the pandemic, is seeing varying levels of infection rates across the country.

It was also among the first to relax rules around COVID-19 as it sped up its vaccination programme.

In some areas of the US, more people in their 20s are now being treated in hospital for COVID-19 than people in their 70s.

Ministers plan to review the traffic light system for international travel at the end of June, before the holiday season begins, which could see vaccinated people able to avoid quarantining.

The hope is that more of Europe will be on the “green list” by this point as many countries impose tougher restrictions to control a third wave of infection.

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