According to US data that was made public yesterday, the labor market in the country is just slowing down, not becoming worse. Since inflation is under control, a scenario with declining interest rates calls for a soft landing for the US.
The BSE Sensex broke through the psychological barrier of 84,000, and Nifty easily cleared the 25,650 mark, as benchmark indices were driven higher in Friday’s trading on hopes that the start of the Fed rate-easing cycle will spark risk-on trade and result in foreign flows into India.
Data that was made public overnight indicated that jobless claims in the US had reached their lowest position since May and suggested that the labor market is robust, allaying worries about a potential slowdown in the US economy.
Overnight, the Dow Jones Industrial Averages and S&P 500 index both surged to 1.7%. Asia saw a rise in markets in Korea, Japan, and Hong Kong. Local stocks followed the global rally’s path.
The Sensex surged to 84,202.43, up 1,017.63 points, or 1.22 percent. Today, it reached a record high of 84,240.50. Out of the thirty index stocks, thirty were trading at a profit. At 25,666.55, the Nifty was trading 250.75 points, or 0.99 percent, higher. It reached a record-breaking high of $25,692.70.
“The Dow and S&P 500 setting yet another record highs overnight is indicative of the strength of this ongoing global bull run, led by the mother market US,” stated V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
The US labor market is not failing; rather, it is simply slowing down, according to reliable data. Since inflation is under control, a scenario with declining interest rates calls for a soft landing for the US.