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Global shares hold near record highs, China’s slip after Party’s party

Global shares held near their record high on Friday as investors looked to U.S. jobs data for signs of balanced economic growth with tame inflationary pressure, while Chinese shares dropped a day after China’s Communist Party celebrated its centenary.


European stocks are expected to open moderately higher, with both pan-European Euro Stoxx futures and Britain’s FTSE futures trading up 0.4%.


Japan’s Nikkei (.N225) gained 0.2% and most other markets held firm but MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 0.8%, due to decline in Chinese and Hong Kong shares.


Shanghai Composite (.SSEC) fell 1.7%, on course to mark its biggest fall since March, as investors grew cautious that, with the big celebration out of way, China’s monetary policy could be tightened.


Morgan Stanley says the phenomenon has prompted many questions from its clients about how to effectively estimate retail activity.


“We find that retail investors tend to prefer companies in sectors they are likely to be familiar with as consumers, such as consumer discretionary, communication services, and technology,” the U.S. investment bank said in a note.


Applying its own methodologies, Morgan Stanley found that over the five-year period from July 2016 to June 2021, stocks with high retail participation continued to outperform stocks with low retail participation over the subsequent one month.


The bank’s number crunching also highlighted that these traders have bifurcated quality preference, with greatest activity in high quality and junk names.


Meta Material, formerly Torchlight Energy, was the latest name to see huge speculative bets by small individual traders. Clover Health Investments and Koss Corp were other names that made headlines on a retail trading frenzy.


Seven of the 11 majors S&P sectors rose, with economy-linked industrials (.SPLRCI), materials (.SPLRCM) and energy (.SPSY) among the biggest gainers. Energy jumped 0.4% on the back of higher oil prices.


Tesla Inc (TSLA.O) gained 4.3% as the electric vehicle maker opened a solar-powered charging station with on-site power storage in China and as bitcoin prices retraced some losses.


At 11:26 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 11.66 points, or 0.03%, at 33,933.92, the S&P 500 <.SPX> was up 1.45 points, or 0.03%, at 4,247.89, and the Nasdaq Composite (.IXIC) was up 16.05 points, or 0.11%, at 14,269.32.


Nikola Corp (NKLA.O) gained 3% after the electric and hydrogen vehicle maker said it is investing $50 million in Wabash Valley Resources LLC to produce clean hydrogen in the U.S. Mid-West for its zero-emission trucks.


Among so-called meme stocks, software firm Alfi Inc (ALF.O) dropped 26.8% after more than doubling in value in the prior session, while Torchlight Energy Resources Inc (TRCH.O) slumped 30.1% for the second day after announcing an upsized stock offering.


Advancing issues outnumbered decliners by a 1.72-to-1 ratio on the NYSE and by a 1.43-to-1 ratio on the Nasdaq.


The S&P index recorded 30 new 52-week highs and no new low, while the Nasdaq recorded 73 new highs and 18 new lows.


Reporting by Devik Jain and Medha Singh in Bengaluru; Editing by Maju Samuel

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