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U.S. payrolls report, trade optimism buoy stocks

U.S. payrolls report, trade optimism buoy stocks
The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, April 5, 2019. REUTERS/Staff   -   Copyright  STAFF(Reuters)
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By Chuck Mikolajczak

NEWYORK (Reuters) – Global stocks rose to a fresh six-month high on Friday after concerns about an economic slowdown were lessened by U.S. labour market data, while optimism that a trade deal between the United States and China was drawing closer also lifted sentiment.

After results some analysts saw as distorted by the partial government shutdown in the prior two months, data showed U.S. employment growth accelerated from a 17-month low in March, buoyed by milder weather.

Unemployment Dashboard interactive: https://tmsnrt.rs/2RIa8gG

U.S. short-term interest-rate futures held on to earlier slight losses after the data, as contracts tied to the Federal Reserve’s policy rate continue to price in a little less than a 50 percent chance of an interest rate cut by year’s end, and a little more than even odds for a cut early next year.

“February was an unusually weak number, having a bounce back number, the market was expecting that, but if you saw another number that was weak like that it probably would have thrown the market for a loop,” said Joseph Amato, President and CIO of equities at Neuberger Berman in New York.

“Numbers like this tell you there is still decent momentum here and you are shifting to more trendline growth than the more significant growth that we experienced in the US economy over the last 12 to 18 months.”

The Dow Jones Industrial Average rose 39.95 points, or 0.15%, to 26,424.58, the S&P 500 gained 13.31 points, or 0.46%, to 2,892.7 and the Nasdaq Composite added 46.91 points, or 0.59%, to 7,938.69.

The S&P 500 scored a seventh straight day of gains, its longest winning streak in 18 months.

MSCI All Country World Index Market Cap: http://tmsnrt.rs/2EmTD6j

U.S. and Chinese trade negotiators will continue talks next week by video conference as they try to reach a deal to resolve the trade war, White House adviser Larry Kudlow said on Friday.

The pan-European STOXX 600 index rose 0.09%, notching its best weekly performance in three weeks, and MSCI’s gauge of stocks across the globe gained 0.34% its second straight weekly gain.

Better-than-expected data out of Germany, along with the U.S. jobs report, and a possibly delayed British departure from the European Union also helped boost risk appetite for European shares.

German industrial output rose 0.7% in February as mild weather helped a surge in construction activity, although manufacturing production slipped.

Global assets in 2019: http://tmsnrt.rs/2jvdmXl

U.S. Treasury yields dipped, with the yield curve flattening as traders focussed on the weaker portions of the payrolls report that showed wage growth slowed.

Benchmark 10-year notes last rose 3/32 in price to yield 2.5007%, from 2.51% late on Thursday.

President Donald Trump said on Friday the Fed should lower rates, noting the jobs numbers showed the economy had performed well but adding that action by the U.S. central bank had really slowed down the economy.

In currencies, the dollar moved slowly higher for a third straight week of gains against a basket of major currencies. The dollar index rose 0.08%, with the euro down 0.03% to $1.1217.

Global currencies vs. dollar: http://tmsnrt.rs/2egbfVh

U.S. crude settled up 1.6% at $63.08 and Brent settled at $70.34, its highest level in six months, up 1.4% on the day as the payrolls number put demand worries at bay.

(Reporting by Chuck Mikolajczak in New York; Editing by James Dalgleish and Susan Thomas)

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