ASX set to rise as Wall Street winning streak continues
US stocks hit record highs in New York on Friday following an encouraging report on hiring across the country, although trading was volatile as the bond market was hit by another day of sharp swings .
The S&P 500 rose 17.47, or 0.4%, to 4,697.53 and hit an all-time high for the seventh consecutive day. The Dow Jones Industrial Average gained 203.72, or 0.6%, to 36,327.95, and the Nasdaq composite added 31.28, or 0.2%, to 15,971.59.
The Australian equity market is expected to have a positive start to the session on Monday with futures pointing to a jump of 22 points, or 0.3%, at the opening.
However, the trade was dispersed and after reaching an initial gain of 0.8%, the S&P 500 at one point gave up almost everything. Stocks fell back in the middle of the day as Treasury yields surprisingly slumped. A measure of nervousness in the stock market also turned around around the same time.
The 10-year yield, which tends to move with expectations for the economy and inflation, has fallen to 1.45% and is near its lowest level since September. It was 1.58% just two days earlier. Analysts have had various explanations for this and other sharp moves in the bond market, which some have called counterintuitive.
The Dow Jones and the Nasdaq nevertheless joined the S&P 500 by setting all-time highs. Smaller Russell 2000 stocks fared even better, jumping 1.4%
An encouraging report from Pfizer has helped lift the market, especially those companies that need daily life the most to get back to normal after the pandemic. Pfizer rose 10.9% after saying its experimental pill sharply reduced hospitalization and death rates for COVID-19 patients. Airlines, casinos, cruise lines, and live event companies have seen similar jumps.
The headline of the day was from the Department of Labor, which showed employers hired 531,000 net workers in October. It was over 100,000 above economists’ expectations. The gains were widespread across all industries, and the government also revised upward employment growth figures in previous months.
A potential point of concern for the markets was a sharp increase in workers’ wages, up 4.9% from the previous year, which may fuel concerns about inflation. But the figures were relatively in line with economists’ expectations.