U.S. stocks rallied back from yesterday’s sharp drop, with a stronger-than-expected December labor report appearing to ease global economic uneasiness, which was followed by more dovish commentary from Fed Chairman Jerome Powell that seemed to ease policy mistake concerns. Treasury yields moved solidly higher and the U.S. dollar dipped. Crude oil prices added to a weekly surge and gold fell. The global markets moved mostly higher on the aforementioned events, which joined trade talk optimism and expectations of further stimulus in China.

The Dow Jones Industrial Average (DJIA) jumped 747 points (3.3%) to 23,433, the S&P 500 Index rallied 84 points (3.4%) to 2,532, and the NASDAQ Composite surged 275 points (4.3%) to 6,739. In moderately heavy volume, 1.1 billion shares were traded on the NYSE and 2.5 billion shares changed hands on the NASDAQ. WTI crude oil rose $0.87 to $47.96 per barrel and wholesale gasoline was little changed at $1.35 per gallon. Elsewhere, the Bloomberg gold spot price fell $9.36 to $1,284.91 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—dipped 0.1% to 96.17. Markets were higher for the week, as the DJIA rose 1.7%, the S&P 500 Index grew 1.9%, and the NASDAQ Composite advanced 2.4%.

Nonfarm payrolls rose by 312,000 jobs month-over-month (m/m) in December, compared to the Bloomberg forecast of a 184,000 increase, and the rise of 155,000 seen in November was revised upward to a gain of 176,000 jobs. The total upward adjustment to October and November was an increase of 58,000. Excluding government hiring and firing, private sector payrolls increased by 301,000, versus the forecasted gain of 185,000, after rising by an upwardly revised 173,000 in November.

The unemployment rate ticked higher to 3.9%, above estimates of 3.7%, while average hourly earnings were up 0.4% m/m, slightly above projections of 0.3% and above November’s unrevised 0.2% gain. Y/Y, wage gains were 3.2% higher, exceeding estimates and November’s rise. Finally, average weekly hours were 34.5, up slightly from November’s unrevised 34.4 rate, and matching estimates of 34.5.

Treasuries dropped, with the yields on the 2-year and 10-year notes jumping 11 basis points (bps) to 2.49% and 2.66%, respectively, while the 30-year bond rate rallied 7 bps to 2.97%. The recent rockiness of the market has credit worthiness in view. However, a significant catalyst came from eased concerns that the Fed is moving too quickly in its pace of rate hikes despite growing global commotion, especially in China. Federal Reserve Chairman Jerome Powell, in a joint interview with his predecessors Janet Yellen and Ben Bernanke, delivered remarks in which he highlighted that the Fed will be patient and flexible with rate hikes, tweaking its debt-laden balance sheet and watching incoming data. He also noted that weakness in China, a source of heightened volatility seen in U.S. equities recently, is spilling over to other markets.

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