Global markets brush off deficit woes as Trump budget passes, US jobs impress
The US economy added 147,000 jobs in June while unemployment dipped to 4.1 per cent from 4.2 per cent, a sign of US labour market resilience despite the White House's wave of tariffs.
'We have a nice rally going, and the reason for that is that the employment data was stronger than expected,' said Peter Cardillo of Spartan Capital Securities, who noted that the market overlooked that the job additions included a heavy share of public sector posts.
Markets also monitored progress on Trump's massive fiscal package, which extends tax reductions but also includes controversial cuts to social programmes and is projected to swell the US deficit.
The House of Representatives approved the Bill yesterday shortly after the stock market closed, sending Trump a major legislative win.
Both the S&P 500 and Nasdaq ended a holiday-shortened session at records.
'Market participants (and the economy) will be digesting the implications of the bill for some time, but it is fair to say that neither the stock market nor the Treasury market are living in fear of deficit forecasts,' said a note from Briefing.com.
Earlier, London's stock market and the pound recovered, having taken a knock Wednesday on rumours that British finance minister Rachel Reeves faced losing her job.
Oil prices fell, with Opec and the cartel's crude-producing allies expected to announce a rise to output Sunday.
Investors had been keenly awaiting the US government's monthly non-farm payrolls report, seen as one of the best data points on the health of companies and the labor market.
'The much stronger non-farm payrolls data means a July rate cut is now no longer in consideration, which is music to stock market bulls' ears', said City Index and FOREX.com analyst Fawad Razaqzada, because it indicates the economy is in good health.
US markets are closed today for US Independence Day celebrations, but negotiators from several nations are racing to reach trade deals with Washington ahead of a July 9 tariff deadline imposed by Trump.
Trump has said he will not push back his deadline to make more deals, though he and some of his officials have mentioned that a number were in the pipeline. — AFP
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