(Bloomberg) — Stocks posted broad gains on Friday after strong earnings from technology companies and investors looked ahead to a U.S. jobs report expected to show further cooling in the labor market, fueling hopes of interest rate cuts.
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Wall Street was poised to add Thursday's advance, with S&P 500 futures up 0.5% and the tech-heavy Nasdaq 100 up 1%. Meta Platforms Inc. Amazon.com Inc. rose 17% in premarket trading on Friday. The tech behemoths rose 7.1% after beating quarterly profit expectations. Snap Inc. 5.8% and Shopify Inc. Up 3%, the pair's extravagant results lifted social media and e-commerce peers. Apple Inc. as its revenue showed weakness in China slipped away
Europe's Stoxx 600 index was also buoyed by positive earnings news, with Mercedes-Benz Group AG up 3.3% and Swedish appliance maker Electrolux AG up 6%. The picture was more mixed in Asia, where key Chinese benchmarks posted steep declines in a session marked by wild swings. A broader volume of the region's stocks rose 0.7%.
Investors will later analyze the monthly US jobs report for confirmation of further cooling in the labor market, which has encouraged Federal Reserve policy easing. Friday's print is expected to show employers added workers at a slower pace in January, after Thursday's revelation of rising jobless claims. Bloomberg economists said the unemployment rate rose to 3.8% from 3.7% in December.
“Any move closer to 4% could see markets reverse challenges as central bank cuts begin,” economists at Rand Merchant Bank in Johannesburg said in a note to clients.
Dollar lower, set for weekly decline. Treasuries were flat after Thursday's advance as traders priced in a faster pace of central bank interest rate cuts in the wake of renewed concerns about the health of US regional banks.
Investors will be closely monitoring developments around these smaller lenders, a sign for sector leaders on their worst week since the fallout from the banking crisis last May. Community Bancorp of New York has plunged 45% since shocking investors Wednesday by cutting its dividend, posting a quarterly loss and increasing loan-loss provisions for commercial real estate exposure.
Meanwhile, Japan's Azora Bank Ltd fell 16%, taking its weekly decline to more than 30%, after the company said it would report its first loss in 15 years due to bad loans tied to U.S. assets.
During a volatile session in China on Friday, the Shanghai Composite fell nearly 4% as healthcare and technology stocks tumbled, with some market watchers attributing the losses to selling ahead of the Lunar New Year holiday. It later narrowed the decline to 1.5%.
“China needs to fix its asset crisis before it can regain investor confidence,” said Kieran Calder, head of Asia equity research at UnionBank Privy. “Until that happens, this is a market for short-term traders.”
Elsewhere, oil headed for its biggest weekly loss since early November as talks progressed on a deal to end the Israel-Hamas war, a key step toward ending the conflict. Gold posted its biggest weekly gain since early December as lower Treasury yields lent support to the metal amid concerns over US regional banks.
Some key movements in the markets:
Shares
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The Stoxx Europe 600 was up 0.6% as of 10:22 a.m. London time.
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S&P 500 futures rose 0.5%
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Nasdaq 100 futures rose 1%
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Futures for the Dow Jones Industrial Average were unchanged
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The MSCI Asia Pacific index rose 0.8%
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The MSCI emerging market index rose 0.9%
Coins
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The Bloomberg Dollar Spot Index fell 0.1%
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The euro rose 0.2% to $1.0889
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The Japanese yen fell 0.2% to 146.68 per dollar
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The maritime yuan was little changed at 7.1892 to the dollar
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The British pound was up 0.1% at $1.2760
Cryptocurrencies
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Bitcoin was down 0.2% at $43,004.6
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Ether rose 0.2% to $2,308.26
Bonds
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The yield on 10-year Treasuries was little changed at 3.89%.
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Germany's 10-year yield rose three basis points to 2.18%
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Britain's 10-year yield rose six basis points to 3.81%
materials
This story was produced with the help of Bloomberg Automation.
–With assistance from Richard Henderson and Chiranjeevi Chakraborty.
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