Zürcher Nachrichten - US stocks rise as weak jobs data boosts rate cut odds

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US stocks rise as weak jobs data boosts rate cut odds
US stocks rise as weak jobs data boosts rate cut odds / Photo: JOE RAEDLE - GETTY IMAGES NORTH AMERICA/AFP/File

US stocks rise as weak jobs data boosts rate cut odds

Wall Street stocks shrugged off early weakness Wednesday and finished with solid gains after poor US hiring data boosted expectations that the Federal Reserve will cut interest rates next week.

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The report showed US companies shed 32,000 jobs in November, payroll firm ADP said, in a surprise drop that added to worries about economic weakness while also boosting expectations for Fed monetary policy relief.

"The market is happy with what the weaker than expected jobs report will mean for the Fed's likelihood of cutting rates when they meet on December 9th and 10th," said Sam Stovall of CFRA Research.

"We're back into the optimism surrounding the Fed cutting rates before the year is out."

All three major US indices finished higher, with the S&P 500 up 0.3 percent.

"The modest fall in the ADP payrolls measure in November... should be enough to persuade the (Fed) to vote for another cut next week," said Stephen Brown at Capital Economics.

Futures markets now put the chances of the Fed cutting interest rates on December 10 at nearly 90 percent.

Lower interest rates make it easier for companies and consumers to borrow money, so the prospect of Fed rate cuts tends to boost stocks.

Optimism over US rate cuts won an additional boost from reports that Trump's top economic advisor Kevin Hassett -- a proponent of more rate reductions -- is the frontrunner to take the helm at the Fed when Jerome Powell's tenure ends in May.

The euro hit a seven-week high against the dollar, noted analyst Axel Rudolph at trading platform IG International.

"The US central bank is expected to cut rates in December with a near 89 percent probability whereas the ECB isn't likely to do so for much of next year," he said.

Meanwhile the pound gained around one percent against the dollar, also receiving a boost from data showing stronger than expected activity from the UK services sector.

Stronger sterling weighed on London's benchmark FTSE 100 stock index, which features major companies earning in dollars, and which ended the day down 0.1 percent.

A recovery in Bitcoin has also helped support equity markets.

"A continued bounce in bitcoin and other cryptocurrencies has stoked a renewed speculative bid," said Briefing.com analyst Patrick O'Hare.

Bitcoin is back above $90,000. It plunged below $83,000 last month after having set a record high of $126,251 in October.

Asian stock markets mostly rose Wednesday.

- Key figures at around 2115 GMT -

New York - Dow: UP 0.9 percent at 47,882.90 (close)

New York - S&P 500: UP 0.3 percent at 6,849.72 (close)

New York - Nasdaq Composite: UP 0.2 percent at 23,454.09 (close)

London - FTSE 100: DOWN 0.1 percent at 9,692.07 (close)

Paris - CAC 40: UP 0.2 percent at 8,087.42 (close)

Frankfurt - DAX: DOWN 0.1 percent at 23,693.71 (close)

Tokyo - Nikkei 225: UP 1.1 percent at 49,864.68 (close)

Hong Kong - Hang Seng Index: DOWN 1.3 percent at 25,760.73 (close)

Shanghai - Composite: DOWN 0.5 percent at 3,878.00 (close)

Euro/dollar: UP at $1.1667 from $1.1625 on Tuesday

Pound/dollar: UP at $1.3352 from $1.3213

Dollar/yen: DOWN at 155.23 yen from 155.88 yen

Euro/pound: DOWN at 87.39 pence from 88.00 pence

Brent North Sea Crude: UP 0.4 percent at $62.67 per barrel

West Texas Intermediate: UP 0.5 percent at $58.95 per barrel

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O.Krasniqi--NZN