World stocks rise on US jobs data, Brexit deal
Global stocks rocketed higher Friday, with Wall Street indices ending at fresh records, following strong US jobs data and a breakthrough in Brexit talks between Britain and the European Union.
Investors greeted an unusual confluence of positive trading catalysts that also included strong economic data out of China and Japan.
“From a macro standpoint, today has produced a lot to chew on, and thus far, the stock market isn’t choking on any of it,” said Briefing.com analyst Patrick O’Hare in a note.
“On the contrary, the news has gone down smoothly, leading to a positive bias in the futures trade.”
US stocks were in positive territory the entire session after the Labor Department reported the US economy added 228,000 jobs last month and unemployment held steady at a low 4.1 percent.
“It’s momentum that’s driving the market at this point,” said Gregori Volokhine, president of Meeschaert Capital Markets. “Investors who sell at the slightest sign of weakness are being punished.”
Gorilla Trades strategist Ken Berman said the jobs report could help enable a “Santa Claus rally,” a term for the stock surge that often takes place near the end of the year.
The S&P 500 gained 0.6 percent to end the week at a record 2,651.50. The Dow also ended at a new all-time high. London’s benchmark FTSE 100 index stormed one percent higher after Britain and the European Union reached a historic deal on divorce terms that allows them to open up talks on a future relationship after the split.
Bourses in Frankfurt and Paris also rose.
The European Commission announced that “sufficient progress” had been made after Britain agreed to keep the Irish border open, pay a 40-45 billion-euro divorce bill and protect rights of expatriates living in the country.
Still, EU officials cautioned that a long road remains ahead as the talks enter the next phase, which is expected to focus
more tightly on the details of the divorce.
“The Brexit breakthrough is welcome news... but it is probably too early to pop the champagne,” Rebecca O’Keeffe, head of investment at online stockbroker Interactive Investor, told AFP.
In Japan, the Nikkei gained 1.4 percent after official data showed the economy grew 0.6 percent in the third quarter from the previous quarter, expanding twice as fast as previously estimated.
Chinese data also surprised to the upside. Exports jumped 12.3 percent yearon-year to $217.4 billion, blowing past the 5.3 percent forecast in a Bloomberg News survey. However, the strong data could exacerbate tensions with major trade partners such as the US and the EU.