(Bloomberg) — Stocks rose on Friday after encouraging indicators on U.S. inflation eased traders’ worst fears about the interest rate outlook and sent Wall Street to new highs.
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Interest rate-sensitive tech stocks were the biggest driver as Europe’s Stoxx 600 index rose 0.4%. U.S. stock futures edged higher after the S&P 500 index hit a record high for the 14th time this year. The Nasdaq 100 also hit an all-time high on Thursday, helped by a record closing price for tech giant Nvidia. Asian stocks rose, with Japan’s Nikkei Stock Average rising 1.9% to a record near the 40,000 yen mark.
The move came after the Federal Reserve’s preferred inflation measure of personal consumption spending rose at the fastest pace in nearly a year in January, but in line with economists’ expectations. Unemployment claims data, which shows a softening labor market, also boosted sentiment.
“This data is a relief to those who were preparing for the worst,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
U.S. Treasuries were firm after rising for two consecutive sessions. The dollar index was little changed.
The yen fell against the dollar on Friday after Bank of Japan Governor Kazuo Ueda said the price target was not yet in sight. His comments could dampen speculation that the central bank could raise interest rates for the first time since 2007 as early as March.
China’s factory activity contracted for the fifth consecutive month in February, suggesting weak demand remains a drag on the economy. Measures of non-manufacturing activity were in expansion mode, helped by a recovery in travel and tourism during the recent long holiday.
The country’s housing sales slump dragged on last month, even as regulators stepped up efforts to revive the troubled property market. Sales of new homes by the 100 major real estate companies decreased by 60% compared to the previous year.
Meanwhile, the US PCE report failed to shake up the broader disinflationary trend that supports expectations for rate cuts.
“For a market focused on when the Fed will move to lower interest rates, this report is not a question of ‘if’ but ‘when’ the Fed will begin lowering rates in 2024,” said Quincy Crosby of LPL. It will help restore confidence.” Finance.
San Francisco Fed President Mary Daly said central bank officials were prepared to lower interest rates if necessary, but stressed there was no urgent need to cut rates given the strength of the economy. Rafael Bostic in Atlanta said the central bank could start cutting rates this summer.
Loretta Mester, head of the Federal Reserve Bank of Cleveland, said Thursday’s inflation data showed policymakers are doing more to ease price pressures, but she also doubted the Fed would cut interest rates three times this year. He said his expectations remain unchanged.
Bitcoin held steady at around $61,000 as demand from exchange-traded funds (ETFs) continued. BlackRock Inc.’s iShares Bitcoin Trust recorded a record inflow of $612 million on Wednesday.
Oil prices rose modestly for the week as market indicators continued to show signs of strength as the Organization of the Petroleum Exporting Countries (OPEC+) is set to decide earlier this month whether to extend supply cuts into next quarter. I was on track.
This week’s main events:
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Eurozone S&P World Manufacturing PMI, CPI, Unemployment Rate, Friday
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BOE Chief Economist Hugh Pill speaks on Friday
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US Construction Spending, ISM Manufacturing, University of Michigan Consumer Sentiment, Friday
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Fed’s Rafael Bostic and Mary Daly speak on Friday
The main movements in the market are:
stock
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As of 8:17 a.m. London time, the Stoxx Europe 600 was up 0.4%.
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S&P 500 futures rose 0.2%
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Nasdaq 100 futures rose 0.3%
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Dow Jones Industrial Average futures little changed
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MSCI Asia Pacific index rises 0.5%
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MSCI Emerging Markets Index rose 0.2%
currency
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Bloomberg Dollar Spot Index little changed
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The euro rose 0.1% to $1.0817.
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The Japanese yen fell 0.4% to 150.56 yen to the dollar.
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The offshore yuan was almost unchanged at 7.2123 yuan to the dollar.
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Sterling rose 0.1% to $1.2638.
cryptocurrency
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Bitcoin rose 0.5% to $61,734.62
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Ether rose 0.7% to $3,374.96
bond
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The 10-year Treasury yield rose 2 basis points to 4.27%.
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Germany’s 10-year bond yield rose 4 basis points to 2.45%.
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The UK 10-year bond yield rose 4 basis points to 4.16%.
merchandise
This article was produced in partnership with Bloomberg Automation.
–With assistance from Richard Henderson.
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