U.S. Stocks Rallied on Friday while Asian Market was Closed

U.S. stocks surged forward to a record high with a late-session advance on Friday. On the other hand, Treasuries tumbled down as a drop in jobless claims hinted at a modest firming of the labor market.

The S&P 500 Index stopped a two-day decline. Furthermore, gains for tech shares boosted the Nasdaq 100 to a bigger advance, and ten-year Treasury yields jumped by about 1.15%. The Stoxx Europe 600 Index rallied as well, thanks to strong results from Credit Agricole SA and Royal Mail Plc.

Over the last week, applications for U.S. state unemployment benefits dropped slightly, signaling that the labor market is gradually improving as the Covid-19 vaccine rollout continues. Besides, business restrictions are easing with lesser virus cases. At the start of February, there was a sharp run-up in equities. However, U.S. stocks have paused while traders weighed the implications of the latest inflation data.

Overall, the S&P 500 Index soared by 0.2%, while the StoxxEurope 600 Index jumped by 0.5% on Friday. The MSCI Asia Pacific Index also climbed up by 0.2%, and the MSCI Emerging Market Index added 0.4%.

So far, a debate continues over whether additional U.S. stimulus, the coronavirus vaccine distribution, and the authority’s determination to kickstart economic growth will cause the American economy to overheat.

What do the stock market analysts think?

Nancy Davis, the founder of Quadratic Capital Management, stated that inflation is not showing up in the data right now. However, inflation is still on its way due to fiscal and monetary stimulus and pent-up consumer demand. All of those should intensify as the economy reopens.

On Wednesday, Federal Reserve Chair Jerome Powell stated that the U.S. job market remains a long way from a full recovery. He also asked both the private sector and lawmakers to support workers. According to Powell, it will require more than a supportive monetary policy to sustain maximum employment.

On Friday, oil prices plunged after capping the longest run of gains in two years. The greenback held steady, though, and Bitcoin soared above $47,000.

Lunar New Year public holidays begin in nations across Asia, and the markets are closed. Meanwhile, investors are waiting for the Bank of Russia’s policy decision, which is due later on Friday.

The yield on 10-year Treasuries surged forward by one basis point to 1.15% on Thursday. The yield on two-year Treasuries remained unchanged at 0.11%, though. Germany’s 10-year yield plummeted down by two basis points to -0.46%, and Britain’s 10-year yield also declined by two basis points to 0.47%.

Simultaneously, the euro climbed up by 0.1% to $1.2125, and the British pound lowered by 0.2% to $1.3806.