Stocks jump and markets await new economic data

US bond markets absorbed the statements of Federal Reserve officials (the US Central Bank) and the economic data released this week. Yields fell and stock indices jumped, with the Dow Jones Industrial Average achieving its first winning week in five weeks.

During the last trading days of the week, the world’s most famous index added 387 points to its value, in addition to the 340 points it added yesterday, Thursday, to end the week with an increase of 1.75%, compared to its level at the end of last week.

The broader S&P 500 rose 1.61%, while the Nasdaq jumped nearly 2%, with the three major indices ending the week in the green.

Weekly gains in the S&P 500 were 1.90%, while the Nasdaq was 2.58%.

On Thursday evening, the head of the Federal Reserve Board in Atlanta, Rafael Bostic, stated that he would prefer a “slow and steady” hike in interest rates, to be stopped, mid-summer or later.

The next two weeks will see the monetary policy meetings of the Federal Reserve and the European Central Bank, as well as the publication of US jobs data. On Sunday, the annual parliament session will be held in China, during which Beijing will set its economic goals for this year.

On the other side of the Atlantic, European stocks rose on Friday, after hopes grew that the Federal Reserve would take a cautious approach to raising interest rates, which led to a rise in the prices of shares of the technology sector, while shares of mining companies continued to achieve gains, amid increasing bets on the recovery of demand in Europe. China.

The European Stoxx 600 index added 0.9% to its value, supported by a 1.8% rise in interest rate-sensitive technology shares.

The mining index jumped more than 7% this week, recording the largest weekly increase since May 2021, and outperforming other major sectors such as real estate and healthcare. The STOXX 600 rose 1.4% during the week.

Gold prices rose clearly during Friday trading, recording the largest weekly increase since mid-January, in conjunction with the dollar’s decline, while dealers assess the prospects that the Federal Reserve will continue to raise interest rates.

During Friday’s trading, spot gold contracts rose 14 dollars an ounce, and recorded a price of 1860 dollars, while gold futures contracts for May delivery recorded about 1854.60 dollars an ounce.

Analysts attributed the rise in gold prices during trading to the weakness of the dollar index, influenced by the statements of the Federal Bank official, in addition to the decline in the rates of return on US Treasury bonds, after the significant increases on Thursday.

Also on Friday, the benchmark US Treasury bond yield for 10 years fell to 3.95%, after reaching 4.09% during Thursday’s trading.

Gold prices also benefited from the issuance of the World Gold Council report, which indicated that central banks around the world continued to buy gold during last January.

In a note sent to its clients on Friday, Commerzbank indicated that “the rise in gold prices observed this week, despite expectations of higher interest rates, probably indicates that the correction of the gold price has been completed to some extent, and that the yellow metal may have reached the bottom at the beginning of the period.” the week”.

In a related way, oil prices recovered from a short wave of selling, to rise by a dollar per barrel on Friday, and end the week on an increase, driven by renewed optimism about demand from China, the largest oil importer.

Brent crude futures rose by $1.08, or 1.3%, to settle at $85.83 a barrel. US West Texas Intermediate crude futures settled at $79.68 a barrel, up $1.52, or 1.9%.

Both benchmarks recorded their highest closing levels since February 13.

Reuters said that prices fell earlier in the session by more than two dollars a barrel, after a media report stated that the UAE was witnessing internal discussions about leaving OPEC and pumping more oil.

Prices rebounded when two informed sources told the agency that the report was “far from the truth”.

Brent and West Texas Intermediate achieved the third largest weekly percentage gains this year, as strong Chinese economic data boosted hopes for oil demand growth.