(Bloomberg) — A flurry of data showing the American economy’s resilience has put US stocks on course for their strongest week of the year.
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The latest readings, from inflation to jobless claims and retail sales, have reassured investors and supported hopes that the world’s biggest economy is heading for a “Goldilocks” scenario of contained price pressures accompanied by resilient growth as the Federal Reserve prepares to cut interest rates. The S&P 500 has rallied 3.7% this week, while the Nasdaq 100 is up more than 5%, the biggest gains for both indexes since November.
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“There is little in the data flow now to really derail sentiment in the immediate near-term,” said Chris Weston, head of research at Pepperstone Group Ltd.
Treasury yields dropped across the curve Friday, retracing some of their surge in the wake of Thursday’s positive economic prints. The move was supported by gains in European bonds and as oil prices deepened their retreat on the day. The dollar slipped, on course for a third week of declines, the longest such losing streak in more than five months.
Stock markets around the world have largely erased last week’s losses, when traders were worried the Fed wouldn’t reduce borrowing costs fast enough to achieve a soft landing for the US economy. In Europe Friday, the Stoxx 600 Index added 0.2% as it headed for its best week since May. US equity futures were little changed.
Friday’s market gains were strongest in Asia, where stocks notched their best weekly performance in over a year, led by Japan as a weaker yen boosts exporters’ earnings prospects. The yen gained on the day, paring its biggest weekly drop in almost two months.
Among individual stock moves, Applied Materials Inc. fell in US premarket trading, after the semiconductor capital-equipment company’s forecast disappointed bullish investors looking for a bigger payoff from artificial intelligence spending. Bayer AG jumped 10% following a significant win for the German company in long-running cancer litigation over its Roundup weedkiller.
The latest gains on Wall Street saw the S&P 500 post its strongest six-day winning run since November 2022. Strategists at Bank of America Corp. said US stocks just recorded a seventh straight week of inflows, underscoring the sustained appetite for equities among investors. BofA said about $5.5 billion went into US equity funds in the week through Aug. 14, in a note citing EPFR Global data.
In commodities, gold was on track for a weekly gain. Oil’s drop came as traders weighed the strong US economic data and a possible attack by Iran or its proxies on Israel against a lackluster Chinese demand outlook.
Key events this week:
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US housing starts, University of Michigan consumer sentiment, Friday
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Fed’s Austan Goolsbee speaks, Friday
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Canada housing starts, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures were little changed as of 7:26 a.m. New York time
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Nasdaq 100 futures were little changed
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Futures on the Dow Jones Industrial Average were little changed
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The Stoxx Europe 600 rose 0.2%
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The MSCI World Index rose 0.3%
Currencies
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The Bloomberg Dollar Spot Index fell 0.2%
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The euro rose 0.2% to $1.0992
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The British pound rose 0.4% to $1.2904
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The Japanese yen rose 0.8% to 148.13 per dollar
Cryptocurrencies
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Bitcoin rose 3.4% to $58,604.51
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Ether rose 2.9% to $2,624.92
Bonds
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The yield on 10-year Treasuries declined four basis points to 3.87%
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Germany’s 10-year yield declined five basis points to 2.22%
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Britain’s 10-year yield declined three basis points to 3.89%
Commodities
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West Texas Intermediate crude fell 2.7% to $76.07 a barrel
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Spot gold rose 0.5% to $2,469.16 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Richard Henderson, Robert Brand, Sagarika Jaisinghani, Divya Patil and Lynn Thomasson.
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