Nobody was expecting that. After a shortened week of trading marked by volatility and large sell-offs in household name stocks, led by Apple, US jobs data has given investors a reason to buy across the world.
The FTSE 100 is up by more than 2% in afternoon trading, among a host of strong performances on European bourses. The German Dax was up by 2.7%.
ADP payrolls data yesterday had suggested that the closely followed non-farm payrolls number might be higher than the 177,000 average expected by economists. But at 312,000 new jobs added in December, the tally came in far above the most bullish expectations – while wage growth also accelerated.
The data will provide some comfort to Federal Reserve chairman Jerome Powell, who is speaking at a panel event in Atlanta, Georgia.
Markets have been roiled in recent months by fears that the Fed is intent on a course of monetary tightening even as growth slows – and indeed some recent data have seemed to suggest that a slowdown is on its way.
Yet the jobs numbers seem to point to a different picture, and have given Wall Street a buying signal.
The Dow Jones industrial average and the Nasdaq are both on course for 2% gains, while the S%P 500 is up by 1.8%.
The more positive tone had been set earlier in the day by news that the US and China have scheduled talks beginning on Monday to try to make progress on resolving their long-running trade dispute.
In the UK, meanwhile, today’s services purchasing managers index (PMI) pointed to a continuation of the “Brexit anxiety” which has held back the economy.
Data compiler IHS Markit said the tepid expansion suggested that overall growth in the UK economy will come in at 0.1% for the fourth quarter, a significant slowdown.
Thanks for reading this week – normal service resumes with Graeme Wearden at the helm on Monday. JJ