U.S. stocks pushed toward all-time highs, the dollar strengthened and the Treasury yield curve flattened after a report showed the economy is adding jobs with few signs of inflation and President Donald Trump pressured the Federal Reserve to sustain growth, ONA reports citing Bloomberg.
“On the bigger picture, it looks like a very strong labor market is a good sign for the economy, but low inflation is also attractive for financial markets,” said John Vail, chief global strategist at Nikko Asset Management, which has around $202 billion in assets under management. “So it’s a bit of a Goldilocks situation.”
The S&P 500 index rose for a seventh consecutive day, the longest rally since 2017, and approached the record high reached in September. An underweight rating on Dow Inc. by JPMorgan weighed on the Dow Jones Industrial Average. Global stocks edged higher earlier following remarks from both China and the U.S. that progress was being made in trade talks. The pound weakened after U.K. Prime Minister Theresa May asked the EU to delay Brexit to June 30.
Payrolls rose by 196,000 in March, a Labor Department report showed. The median estimate in a Bloomberg survey saw an increase of 177,000. Wage gains eased and the unemployment rate held near a 49-year low.
“This report came out right in the sweet spot, where it still showed that employment and the labor market are still solid, which will underpin a strong consumer moving forward,” said Shawn Cruz, TD Ameritrade’s manager of trader strategy.
Even so, Trump said the Fed should cut interest rates and stop shrinking its balance sheet, maintaining his pressure on the central bank over its monetary policy. The Fed’s interest rate increases last year outraged the president, who even discussed firing the central bank’s chairman, Jerome Powell.
“He’s made these kinds of comments before,” said Olivia Engel, chief investment officer for active quantitative equities at State Street Global Advisors. “I think the market is focused on other things like the real sources of earnings, the real state of the economy.”
Chinese President Xi Jinping is pushing for a rapid conclusion to the negotiations with the U.S., while Trump on Thursday talked up prospects for a “monumental” agreement that may still be some weeks away. The improved tone in the talks has helped drive the recent rally in equities, with the MSCI All Country World Index touching a six-month high this week.
Elsewhere, West Texas crude strengthened above $62 a barrel, preserving its fifth straight weekly advance. Bitcoin climbed and hovered around $5,000.