Written by 3:18 pm Europe Economy

Stock Rally Gathers Strength; Nasdaq 100 Up 2%: Markets Wrap

(Bloomberg) — US stocks gained in early trading after data allayed fears of a supercharged jobs market that would support the case for a more aggressive policy path. Treasury yields ticked lower and a gauge of the dollar declined.

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The S&P 500 rose more than 1%, bouncing back from two days of losses on Thursday. The tech-heavy Nasdaq 100 outperformed, up more than 2%. Asian technology stocks gained earlier amid signs China is easing a regulatory crackdown. Tesla Inc. climbed more than 5%, with tech giants including Apple Inc. Amazon.com Inc. and Microsoft Corp. also among the biggest gainers.

US jobs data failed to hold any unwanted surprises, while underscoring the resilience of the labor market despite the Federal Reserve’s aggressive monetary tightening. Initial unemployment claims rose slightly to 225,000, inline with expectations, in the week ended Dec. 24. Continuing claims rose to 1.7 million in the week ended Dec. 17, the most since early February.

The rally is a small ray of light as a brutal year for stocks and bonds draws to a close. Global equities have lost a fifth of their value in 2022, the largest decline since 2008 on an annual basis, with tech bearing the brunt of the selloff. An index of global bonds has slumped 16% amid sticky inflation and rising interest rates.

“I’m actually not so afraid of tech,” Sylvia Jablonski, CEO and CIO at Defiance ETFs, said on Bloomberg TV. “I do think you’re going to see a recovery later in the year in a lot of these stocks and I think that investors are a little bit too afraid of them right now. They’re going to miss out on a rebound opportunity in the next let’s say 6-9 months.”

Read more: Yardeni Says Stock Bulls Have ‘Narrow Path’ to Victory in 2023

Stocks are rebounding after a selloff gathered pace on Wednesday with risks from the spread of Covid-19 taking center stage. The US said it would require inbound airline passengers from China to show a negative Covid-19 test prior to entry. In Italy, health officials said they would test arrivals from China after almost half of passengers on two flights from China to Milan were found to have the virus.

Hong Kong removed limits on gatherings and testing for travelers in a further unwinding of its last major Covid rules, offering a boost to the global economy but sparking concerns it would amplify inflation pressures and prompt US policy makers to maintain tight monetary settings.

“Investors are going into 2023 with a cautious mindset, prepared for more rate hikes, and expecting recessions around the globe.” said Craig Erlam, a senior market analyst at Oanda Europe Ltd. “And then there’s China and its u-turn on Covid prevention. It’s been quite the shift from fighting every case to living with the virus and that creates enormous uncertainty for the start of the year.”

Elsewhere in markets, oil dipped amid thin liquidity as investors weighed the fallout from a Russian ban on exports to buyers that adhere to a price cap.

Key events this week:

Some of the main moves in markets:

Stocks

  • The S&P 500 rose 1.5% as of 10:16 a.m. New York time

  • The Nasdaq 100 rose 2.1%

  • The Dow Jones Industrial Average rose 1%

  • The Stoxx Europe 600 rose 0.6%

  • The MSCI World index rose 1.1%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.4%

  • The euro rose 0.3% to $1.0649

  • The British pound rose 0.1% to $1.2033

  • The Japanese yen rose 1% to 133.14 per dollar

Cryptocurrencies

  • Bitcoin rose 0.7% to $16,639.49

  • Ether rose 1.4% to $1,203.88

Bonds

  • The yield on 10-year Treasuries declined two basis points to 3.86%

  • Germany’s 10-year yield was little changed at 2.50%

  • Britain’s 10-year yield advanced five basis points to 3.71%

Commodities

  • West Texas Intermediate crude fell 1.9% to $77.43 a barrel

  • Gold futures rose 0.4% to $1,822.50 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Richard Henderson, Peyton Forte and Robert Brand.

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