(CT) Stocks rally as dollar posts best week this year

By Brendan Walsh and Sarah Ponczek

US stocks climbed to records as the latest jobs report bolstered optimism in the world’s largest economy, continuing equity rallies that took hold in Asia and Europe. The dollar posted its best week this year.

The S&P 500 Index and Dow Jones Industrial Average closed at all-time highs in light volume after data showed hiring increased by more than forecast in November and the unemployment rate held at a 17-year low. The dollar briefly edged lower as investors assessed tepid wage growth that missed estimates, then resumed its fifth consecutive gain. Ten-year Treasury yields inched higher. The jobs data add to a run of recent news that bolstered investor optimism after the US government averted a shutdown and tax reform negotiations made progress. The positive stock moves are a welcome reversal for many investors, who earlier in the week booked profits amid an equity rotation and waning risk sentiment. Looking ahead to next week, traders see an interest-rate increase by the Federal Reserve as pretty much a given.

“The headline number was a very strong number,” said Eric Stein, the co-director of global income and a portfolio manager at Eaton Vance in Boston. “The one negative was on the wage side. It literally changes nothing for next week — they’re going to hike.”
The pound reversed initial gains as the UK and the European Union struck a deal to unlock divorce negotiations, while equities in Europe jumped. Bank shares soared after emerging relatively unscathed from the final batch of Basel III post-crisis capital rules. In Asia, stocks made strong gains after Chinese trade data exceeded analyst estimates and Japan’s economic growth figures were revised higher. Emerging-market stocks rallied.

Meanwhile, oil rose above $57 a barrel in the second day of gains. Gold edged lower for a fifth day.
Terminal customers can read more in our Markets Live blog.
Here are some of the key events for the rest of Friday and next week:
Fed policy makers are projected to raise the target range for their benchmark interest rate next week against a backdrop of continuing robust U.S. economic conditions, a vibrant labor market and forecasts inflation will begin to pick up.
The European Central Bank, the Bank of England and the Swiss National Bank, among others, also set monetary policy.
Among top U.S. economic reports next week are consumer inflation and retail sales for December.
European lawmakers continue to debate Brexit and weigh moves on the next step, while North America Free Trade Agreement (NAFTA) negotiators meet again.

And these are the main moves in markets:
Stocks
The S&P 500 rose 0.6 per cent as of the close of trading in New York.
The Stoxx Europe 600 Index climbed 0.7 per cent to a one-month high.
The U.K.’s FTSE 100 Index gained 1 per cent.

Japan’s Nikkei 225 Stock Average climbed 1.4 per cent to the highest in a week.
The MSCI Emerging Market Index jumped 1 per cent.
Currencies
The Bloomberg Dollar Spot Index gained 0.2 per cent.
The euro slipped 0.1 per cent to $1.1765.
The British pound fell 0.6 per cent to $1.339.
The Japanese yen decreased 0.3 per cent to 113.47 per dollar.
Bonds

The yield on 10-year Treasuries rose one basis point to 2.38 per cent.
Germany’s 10-year yield rose one basis points to 0.3 per cent.
Britain’s 10-year yield climbed three basis points to 1.28 per cent.
Commodities
West Texas Intermediate crude rose 1.2 per cent to $57.35 a barrel.
Gold slumped 0.2 per cent to $1,250.10 an ounce.
Copper gained 0.4 per cent to $2.977 a pound.

With assistance by Netty Idayu Ismail, Chikako Mogi, Adam Haigh, Samuel Potter, and Cormac Mullen

Source: Ceylon Today

Image Courtesy: financialexpress.com