US Stocks Rally on Strong Jobs Data

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US Stocks Rally on Strong Jobs Data

US stocks climbed with the dollar as treasuries dropped on US jobs data, which boosted the confidence in the US economy.

The S&P 500 Index gained 1.1% and pared the weekly drop to 0.8%. The Stoxx Europe 600 Index added 1% after a rout of 2.4%. 10-year Treasuries yields gained a basis point to stand at 2.44%. Futures for gold dropped below $1,200 per ounce, the lowest from December 31. Brent edged closer to the bear market after a 4.9% drop this week.

According to Bloomberg Business Week, US jobless rate has dropped to a low of six years at 5.9% as US employers added more workers than expected.

The Federal Reserve is heading towards ending its bond buying this month while assessing data to determine whether the economy has the strength to withstand high rates of interest. European shares rebounded after they slumped yesterday amid concerns that the asset-buying plan of the central bank would not be sufficient to avoid deflation and revive growth.

Voya Investment Management LLC chief market strategist, Doug Cote said, “This allays the fears about growth and offsets what we’re seeing in Europe. There’s a consistent downward trend in unemployment. It bodes well for not only future GDP growth, but future corporate profits as well.”

US employers increased 248,000 in their payrolls after an August increase of 180,000, which was larger than anticipated.

The Wall Street Journal quoted chief currency strategist of Scotiabank, Camilla Sutton as having said. “This week was about uncertainty around data and the Fed. And the jobs report removes the hurdle and provides the confidence to drive the dollar rally forward.”

Pioneer Investments vice president, Richard Schlanger said, “The Fed has to feel we’re making progress and it’s time for them to consider tightening. The market doesn’t seem to be concerned about inflation.”

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To contact the reporter of the story: Jonathan Millet at john@forexminute.com