Stocks Climb, Treasuries Slump on Solid U.S. Jobs: Markets Wrap

(Bloomberg) — U.S. stocks climbed and bonds fell as a strong jobs report bolstered confidence in the world’s largest economy.

The extended gains into a third day after government data showed payrolls jumped 266,000 last month, the most since January — with the jobless rate dropping to 3.5% and average hourly earnings exceeding projections. Treasury yields jumped above 1.8%. The dollar rose.

Traders pushed up the value of risk assets on the assumption that the American economy isn’t close to signaling a recession — a fear that has confronted investors amid a U.S.-China tariff dispute. A strong jobs report could reduce the urgency for a deal, given that escalating levies have failed to significantly dent growth. But it could also validate Federal Reserve Chairman Jerome Powell’s view that rates can stay on hold following three cuts.

“The much stronger-than-expected 266,000 jobs created in November helps bolster hopes for a pick-up in global growth,” said Alec Young, managing director of global markets research at Russell. “It’s also a well-timed shot in the arm for investor confidence given ongoing U.S.-China trade uncertainty.”

Read: Wall Street Scraps Recession Assumptions After Robust Jobs Data

Earlier Friday, equities rose after China said it’s in the process of waiving retaliatory tariffs on imports of U.S. pork and soy by domestic companies — a procedural step that may also signal a broader trade agreement with the U.S. is drawing closer.

Elsewhere, oil traded near $58 a barrel as the market awaited crucial details on how OPEC+ will distribute cuts among its members. The euro fell after Germany’s industrial slump unexpectedly deepened in October amid a steep decline in investment goods.

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