House Passes Budget to Ease $63 Billion in U.S. Spending Cuts
Emerging Stocks in Best Winning Streak Since 2010 on U.S. Jobs
Emerging-market stocks climbed for a fifth straight week as the U.S. jobless rate slid to the lowest level in three years, boosting the outlook for the global economy.
The MSCI Emerging Markets Index (MXEF) rose 0.4 percent to 1,048.36 in New York, bringing its advance this week to 14 percent and capping the longest run of weekly gains since October 2010. Brazil’s Bovespa Index jumped 1 percent today, the BSE India Sensitive Index (SENSEX) added 1 percent and the Shanghai Composite Index (SHCOMP) rose 0.8 percent. The Micex Index gained 1.5 percent in Moscow.
U.S. payrolls increased by 243,000 last month, the most since April and above the 140,000 median estimate of economists surveyed by Bloomberg. The unemployment rate dropped to 8.3 percent, the lowest level since February 2009, bolstering the fortunes of the world’s largest economy, which is still recovering from a recession that started in 2008.
“This is the most important piece of economic data because it goes to the heart of the strength of the world’s consumer of last resort, the U.S.,” Neil Shearing, an emerging markets economist at Capital Economics Ltd., said by phone from London. “The health of the labor market is critical” to the ability of U.S. consumers to keep spending, he said.
Greece has reached agreement on the basic parameters of a debt swap with private creditors and is in the final stretch of talks with European Union and International Monetary Fund officials on a second financing package for its struggling economy, said Pantelis Kapsis, government spokesman.
Talks over a new loan package for the nation are in “the final phase” and “the main private sector involvement parameters are ready,” Kapsis said in an interview with Real FM radio.
Emerging-market stock funds have had their best start to a year since 2006 in terms of inflows as investors started to discount a Chinese slowdown and the U.S. recovery gained traction, according to EPFR Global.
Flows into developing-nation equity funds totaled $3.5 billion in the week ended Feb. 1, a 43-week high, bringing the total for 2012 to $11.3 billion, according to a report e-mailed today by the Boston-based research company.
Localiza Rent a Car SA, Latin America’s biggest car-rental company, gained 2.5 percent in Sao Paulo after reporting that fourth-quarter profit rose 13 percent to 78.7 million reais ($46 million), beating the median of analyst estimate in a Bloomberg survey. Oil companies Petroleo Brasileiro SA (PETR4) and OGX Petroleo & Gas Participacoes SA advanced as crude gained in New York.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries was unchanged on Feb. 2 at 402 basis points, according to JPMorgan Chase & Co.’s EMBI Global Index.