Jobs Data, Debt-ceiling Clearance Lift Shares, Yields Globally
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Shares worldwide rose, and U.S. Treasury yields went up due to a positive job growth report. Investors think the Federal Reserve will keep increasing the interest rates.
Last Friday, the Labor Department shared data, indicating the U.S. economy had created around 339,000 jobs in the last month. This number was a lot more than most people were expecting, which could imply that there are fewer people available to work and may cause the Federal Reserve to increase interest rates.
The market was happy because the U.S. Senate passed a bill on Thursday. It means the federal government's $31.4 trillion debt ceiling will be lifted. This avoids a possible default. The bill passed the House of Representatives on Wednesday. President Joe Biden will sign it soon.
Tom Plumb, who manages Plumb Balanced Fund, thinks the Fed won't raise interest rates. He thinks this will happen sometime next year. He also said that the US economy is doing better than people think.
Shares in almost 50 countries rose by 1.52% according to MSCI world equity index. STOXX 600 index also increased by 1.21%.
The main indexes on Wall Street increased. Financial, industrial, consumer discretionary, technology, and healthcare stocks all gained.
The Dow Jones went up by 2.12% to 33,762.76. The S&P 500 gained 1.45% and reached 4,282.37. The Nasdaq Composite increased by 1.07% and arrived at 13,240.77.
Investors think that U.S. Treasury yields could go up. But, some people believe that the Fed won't increase rates at its meeting this month. 10-year notes were up at 3.695%, and 2-year notes rose to 4.509%.
The US dollar went up in uneven trading following strong employment data. The dollar index went up 0.483%, causing the euro to drop 0.5% to $1.0707.
On Friday, the price of oil went up by over 2%. This happened because people are interested in a meeting that OPEC and other oil-exporting countries are having this weekend.
Prices for Brent futures increased by 2.5%, ending at $76.13 per barrel. For U.S. West Texas Intermediate (WTI), there was also a 2.3% rise resulting in a price of $71.74.
The value of gold went down because of an increase in the value of the U.S. dollar. The current price for gold decreased by 1.5% to $1,948.11 per ounce. This affected U.S. gold futures as well, reducing their value by 1.55% to $1,947.40 per ounce.
Chibuike Oguh wrote the report in New York. Aurora Ellis and Matthew Lewis edited it.
