In Anticipation of Payrolls, Stocks rise on Rate-Cut Optimism – Europe Market Wrap

Stocks gained as expectations grew that Friday’s jobs report would pave the way for the Fed to commence interest rate cuts this month.

Futures for the S&P 500 rose 0.2% after reaching a new all-time high. Nasdaq contracts rose 0.5%. US Treasuries were barely changed, with the two-year yield nearing its lowest level in almost a year. This week, the Dollar is expected to be its weakest.

Investors are optimistic about today’s nonfarm payrolls report, hoping it will strike a balance between a weakening labour market and policy easing without undermining economic confidence. A larger surprise in either direction might shake markets.

Some investors are worried about the announcement since recent adjustments revealed considerably lower growth than previously reported. The downward changes, which were revealed in the July report, also prompted Trump to fire the head of the Bureau of Labour Statistics, raising questions about the accuracy of future data. Stretched valuations also support restraint.