Global stocks rose to a fresh six-month high on Friday as U.S. labour market data eased concerns about an economic slowdown, while optimism that a trade deal between the United States and China was drawing closer also lifted sentiment.
After outsized 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.
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-per-cent chance of an interest rate cut by year’s end, and a little more than even odds for a cut early next year.
“We are certainly seeing lots of green shoots in the economy, especially service PMIs, employment numbers; the consumer is a really strong driver of this economy and GDP is inching up,” said Janet Johnston, portfolio manager at TrimTabs Asset Management in New York.
“We are seeing a disconnect between the stock and the bond markets that the bond market thinks we are going to have a recession and the stock market is acting like the worst is over.”
Based on the latest available data, the Dow Jones Industrial Average rose 39.95 points, or 0.15 per cent, to 26,424.58, the S&P 500 gained 13.32 points, or 0.46 per cent, to 2,892.71 and the Nasdaq Composite added 46.91 points, or 0.59 per cent, to 7,938.69.
Canada’s main stock index rose for the fifth straight session on Friday as energy stocks gained and a rebound in U.S. jobs growth in March eased slowdown concerns in the world’s largest economy.
The Toronto Stock Exchange’s S&P/TSX composite index was up 84.54 points, or 0.52 per cent, at 16,396.15.
The index reached its highest point since August 31 and secured its best weekly gain since mid-January.
Domestic data showed Canadian economy unexpectedly shed 7,200 jobs in March, its first decline in seven months, reinforcing market expectations that the Bank of Canada will keep interest rates unchanged next month.
The energy sector climbed 2.9 per cent, the most among 11 major sectors.
Oil prices gained 1.5 per cent on Friday as strong U.S. employment data tempered fears about weakening global crude oil demand, and on expectations that an escalating conflict in Libya could tighten oil supplies.
Optimism that Washington and Beijing are approaching a trade deal also boosted crude prices.
Brent crude futures settled at $70.34 a barrel, up 94 cents, or 1.35 per cent. The session high of $70.46 was the strongest since Nov. 12.
U.S. West Texas Intermediate (WTI) crude settled at $63.08 a barrel, up 98 cents, or 1.58 per cent. Earlier in the session, WTI hit $63.24, the highest since Nov. 6.
The financials sector gained 0.2 per cent. The industrials sector rose 0.3 per cent.
SNC-Lavalin Group Inc. was down 1.6 per cent after announcing it has signed a deal to sell part of its stake in Ontario’s 407 toll highway operator for $3.25-billion — some of which will be used to repay part of a loan from Quebec’s pension fund.
Leading the index were Baytex Energy Corp., up 7.7 per cent, Crescent Point Energy Corp., up 7 per cent, and TORC Oil & Gas Ltd., higher by 5.3 per cent.
Lagging shares were Turquoise Hill Resources Ltd., down 4.2 per cent, Great Canadian Gaming Corp., down 2.6 per cent, and WestJet Airlines Ltd., lower by 2.1 per cent.
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 per cent, notching its best weekly performance in three weeks, and MSCI’s gauge of stocks across the globe gained 0.29 per cent and was poised for a 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 per cent in February as mild weather helped a surge in construction activity, although manufacturing production slipped.
U.S. Treasury yields dipped, with the yield curve flattening, as investors who took a gloomier view of the March U.S. payrolls report stepped into the market, buying longer-dated Treasuries.
Benchmark 10-year notes last rose 1/32 in price to yield 2.5061 per cent, from 2.51 per cent 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, on track for a third straight week of gains against a basket of major currencies. The dollar index rose 0.1 per cent, with the euro down 0.07 per cent to $1.1212.
Reuters