Wall Street equities rose as traders assessed data showing China’s economy on the cusp of deflation and prepared for US inflation numbers that will feed into the Federal Reserve’s interest rate decision in late July.
The blue-chip S&P 500 closed 0.2 per cent higher in New York on Monday to end a three-session losing streak, having oscillated between gains and losses early in the day. The tech-heavy Nasdaq Composite also added 0.2 per cent.
The KBW Bank index rose 0.2 per cent even as a top US bank regulator proposed tougher capital rules for the country’s biggest lenders.
The US moves came after data on Friday from the Bureau of Labor Statistics showed the world’s largest economy added 209,000 jobs in June.
The employment report undershot expectations for the first time in 15 months but left some traders “confused”, said Mike Zigmont, head of trading and research at Harvest Volatility Management. “Is this strong enough for the [Federal Reserve] to keep hiking? Is this weak enough to keep the Fed on pause? Is it so weak compared to the past strong months that we’re looking at a soon-to-come recession?”
Analysts at JPMorgan said the “still-tight” labour market “clears the way” for another rate rise from the Fed later this month. After that, expect an “extended hold” from the central bank as economic growth slows, reducing the need for further monetary tightening.
Source: www.ft.com
ENB
Sandstone Group
