The week is ending in bullish form, as once again US job numbers revive the flagging bull market and prompt a broad bounce in risk assets.
- NFPs deliver a shot in the arm for stock markets
- Greenback bolstered on job numbers
- Oil rallies following OPEC and NFPs
Job numbers beat forecasts, manufacturing payrolls surged and wages have continued to rise. Trump’s victory lap on Twitter today and the exuberant market reaction both seem entirely justified. Once again, stocks have been handed the economic news to power the rally higher. Trade war headlines are the volatility-provoking noise, but it is the drumbeat of good US economic figures and decent earnings that have been the real engine for the S&P 500. The concerns of Monday and Tuesday have been banished, as the equity market rebounds once again. Perhaps 30,000 is too much to hope for by year end, but further gains above 28,000 would be entirely in order for the Dow, while the S&P 500 sets its sights on fresh records too. The news has put new life into a flagging US dollar too, boosting the greenback after a week of declines – there can be few people left now expecting a rate cut any time soon, let alone next week.
OPEC might look at a crude oil chart and kid themselves that their cuts, which were admittedly deeper than forecast, occasioned the surge in oil prices, but it is the hope of more economic growth that will provide the real bull case for oil into 2020. As PMIs around the globe begin to turn higher, supported by looser central bank policies, we should see demand for oil pick up as GDP growth accelerates.
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