A disappointing January jobs report increases the likelihood of further stimulus
Wall Street stocks finished higher on Friday amid expectations that a disappointing January jobs report would increase the likelihood of further stimulus. The Labor Department said the U.S. economy added 49,000 jobs in January, slightly below the 50,000 payrolls expected while December’s numbers were revised much lower, to 227,000 from the initial reading of -140,000. As a result, the S&P 500 index rose 0.4%, the Dow Jones Industrial Average gained 0.3%, and the Nasdaq rose 0.57%.
Asian stocks extended gains to start toe week, hovering around all-time highs on hopes the aid package will be passed in the US in the coming weeks. Also, investors continued to cheer upbeat corporate earnings data, progress in the distribution of vaccines, and the slowing rise in coronavirus cases. As such, Japan’s Nikkei 225 surged 2.12%, Australia’s S&P/ASX 200 rose 0.59%, Hong Kong’s Hang Seng gained 0.11%, the Shanghai Composite in China gained 1.03% while South Korea’s Kospi bucked the trend and lost nearly 1% during the session.
In Europe, equities opened in the positive territory, tracking upbeat sentiment in Asia, with the pan-European Stoxx 600 index opening 0.4% higher on Monday. On the data front, German industrial output arrived at 0% versus a 0.3% rise expected and 0.9% last. Meanwhile, U.S. stock index futures rose in early morning trading Monday following the best week since November.
Meanwhile, the dollar holds steady versus major counterparts following a steep decline seen after a disappointing employment report on Friday. EURUSD regained the 1.2000 figure but failed to extend the bounce and turned slightly negative on the day in recent trading despite positive risk sentiment. Also on the negative side, the pair remains below the 20-DMA that continues to act as the key resistance.
Elsewhere, Brent crude has exceeded the $60 handle for the first time since January 2020 on Monday, extending the rally amid positive risk sentiment and expectations of recovery in global energy demand as the pandemic recedes. If the futures manage to confirm the latest breakout on a daily closing basis, the $61 figure will come into market focus in the short term.