Wall Street rose higher than US employment data on Friday, which economists say will deliver the strongest result since August and a powerful indicator of the strong economic recovery in the US.
The S&P 500 closed the trading day at 0.8 percent, hovering just below its late last month high. The technology-heavy Nasdaq Composite was up 0.4 percent, reversing its four-session loss streak.
The S&P 500 floated around its Wednesday night for most of the day, while the Nasdaq had been a whopping 1 percent lower.
With the U.S. economy nearly recovering from coronavirus losses, economists expect from Friday’s report that the economy added 1 million jobs in April. Investors will scrutinize the nonfarm payroll report for indications of possible next steps from the Federal Reserve, which has said it will continue to purchase $ 120 billion a month bonds until the labor market recovers.
“There’s a lot of talk about, we’ll get a million and a half jobs Friday,” said Nick Frelinghuysen, a portfolio manager at Chilton Trust. “The Fed has made it very clear that full employment is their mandate, but I think people are really concerned about when they are going to wind down.”
The yield on 10-year Treasury bonds, which is inversely related to the price of the note and declined slightly for most of the day, rose 0.05 percentage point to 1.57 percent by late afternoon.
Central bankers around the world had a major “communication challenge” surrounding the eventual withdrawal of emergency monetary support measures, said Roger Lee, head of UK equity strategy at Investec.
“If it’s orderly, then you can expect a soft continuation of this year’s stock market rotation” from blocked beneficiaries such as technology stocks in economically sensitive companies such as oil producers and banks, Lee said. “If it is disorderly, it will be a matter of” selling what you can “.”
On Thursday, the Bank of England revised its growth expectations for the UK economy, but stopped following Canada in scaling back its asset purchases.
The BoE maintained the size of its quantitative easing program at £ 895 billion, while also keeping its key interest rate at a record low of 0.1 percent. The UK central bank added that while its asset purchases “could now be somewhat slowed” after becoming the dominant buyer of UK sovereign debt last year, “this operational decision should not be interpreted as a change in monetary attitudes. policy “.
In Europe, the Stoxx 600 closed 0.2 percent and hovered just below the height reached in mid-April.
Sterling fell 0.1 percent against the dollar to $ 1,389.
The dollar, measured against a basket of trading partner currencies, weakened 0.4 percent. The euro gained 0.5 percent to $ 1,206.
Brent crude oil fell 1 percent to $ 68.24 a barrel.