Economic data have eased fears of rising interest rates on the New York stock market and boosted prices. After strong fluctuations at the start, the indices only went in one direction: upwards.
Easing interest rate fears fueled Wall Street on Friday. At the same time, investors were hoping for a soft landing for the US economy. The Dow Jones index gained 2.1 percent to 33,631 points, p
The data sparked hopes that the US Federal Reserve would slow down in its interest in raising interest rates to combat inflation. Following the weak data, a massive wave of buying pushed indices to daily highs. The labor market report for December had already caused a cautiously positive mood. This turned out better than expected, but still did not spark any interest rate hikes. Although the unemployment rate fell, more jobs were created than forecast, but the increase in jobs was the lowest for two years.
The hourly wages, which had risen less than feared, also played a decisive role in investors' buying mood. With rising wages having an inflationary effect, the latest data could ease some of the pressure on the US Federal Reserve's rate-hiking cycle, the market had hoped. At the same time, the generally rosy development on the labor market kept hopes alive that the US economy might be able to avert a recession after all.
"Investors are celebrating the fact that average hourly wages have turned out to be lower than expected. There were fears of severe wage inflation," said market strategist Michael Arone of State Street Global Advisors, explaining the euphoria in the market. Even words of warning from the Fed circles about further rate hikes did not dampen the good mood.
The dominance of the interest rate issue was also evident on the foreign exchange market, where the dollar index plummeted by 1.1 percent as interest rate expectations fell. The bond market was also dominated by speculation that interest rates would rise less sharply - higher prices caused yields to plummet. Significantly lower market interest rates combined with the blatant weakness of the dollar drove the gold price up.
On the other hand, little happened on the oil market. The listings have stabilized after a weekly loss of 8.1 percent. Sentiment remains bearish due to weak US transportation fuel demand, a trader said.
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