Stocks approach record after US jobs report hits sweet spot
NEW YORK (AP) — Stocks climbed today after a better-than-expected report on U.S. jobs eased worries that the economy is slowing too sharply.
U.S. employers added 196,000 jobs last month, more than economists had forecast. More importantly, it gave encouragement to economists who said the prior month's jobs report, which was shockingly weak, may have been an aberration and that the economy can continue to grow, albeit at a slower pace.
The jobs report also hit a happy medium for markets, strategists said. It was neither low enough to heighten recession worries nor high enough to prod the Federal Reserve to raise interest rates.
"This is another green shoot of growth," Steve Chiavarone, portfolio manager and equity strategist at Federated Investors, who pointed to other encouraging data about the U.S. and China's economies from recent weeks. He expects economic growth to re-accelerate after hitting a bottom in the first part of 2009.
And with the Fed on record saying it may not raise rates at all this year, after having done so four times in 2018, "good news now is just good news," Chiavarone said. That's unlike prior market scares, when investors saw strong data as bad news because it could encourage a more aggressive Fed. The mentality flipped earlier this year after the Fed said it may not raise rates at all this year after raising them four times in 2018.
The S&P 500 has climbed every day this week, though most of the gains were only modest, and it now sits just 1.4 percent away from its most recent record high, which was set in September.
The index has been tacking on more gains since closing out its best quarter in nearly a decade, with a 13.1% rise in the first three months of the year. If the index ends Friday higher, it would clinch a seven-day winning streak, its longest in a year and a half.
Stocks around the world have also been climbing as the United States and China say they are making progress on talks to ease their trade war.
President Donald Trump said Thursday the U.S. and China were "rounding the turn" in the talks, which resumed Wednesday in Washington. No details were announced, but Trump said after meeting with Chinese Vice Premier Liu He that "something monumental" could be announced within weeks.