S&P 500 Index SPY closed up +2.13%

The S&P 500 Index SPY on Friday closed up +2.13%, the Dow Jones Industrials Index DIA closed up +1.65%, and the Nasdaq 100 Index QQQ closed up +2.49%.

The S&P 500 Index (SPY) closed higher on Friday, putting the benchmark index on track for its best week since November 2023. The Dow Jones Industrial Average (DIA) also rose, while the Nasdaq 100 Index (QQQ) posted strong gains.

March E-mini S&P 500 futures (ESH25) rose +1.85%, and March E-mini Nasdaq 100 futures (NQH25) rose +2.18%.

Stock indexes Friday traded higher as a US government shutdown on March 15 appeared unlikely after Senate Democratic leader Schumer said Thursday night that he will not block the Republican continuing resolution (CR) to fund the government for 6 months. The House passed the bill on Tuesday, and the Senate was expected to vote later Friday afternoon.

Global equity markets garnered support Friday from a rally in Chinese stocks to a 3-month high on signs of more policy support. Officials from the finance ministry, commerce ministry, the PBOC, and other government bodies plan to hold a press conference on Monday to announce measures to boost consumption.

Stocks were undercut by Friday’s report from the University of Michigan showed that US consumer sentiment in March fell to a more than two-year low, and long-term inflation expectations soared to a 32-year high.

The University of Michigan US Mar consumer sentiment index fell -6.8 to a 2-1/3 year low of 57.9, weaker than expectations of 63.0.

The University of Michigan’s US Mar 1-year inflation expectations indicator unexpectedly rose to a 2-1/3 year high of +4.9%, higher than expectations of no change at +4.3%. The Mar 5-10 year inflation expectations indicator unexpectedly rose to a 32-year high of +3.9% versus expectations of a decline to +3.4%.

The price of Bitcoin S Friday fell -9 ticks. The 10-year T-note yield rose +4.6 bp to 4.314%. June T-notes fell on reduced safe-haven demand as stocks rallied after Senate Democratic leader Schumer said he would not block the Republican bill to keep funding the government, likely averting a government shutdown. T-notes were also under pressure from carryover weakness from a slide in German bund prices following a report that German parties have agreed on a debt package. T-notes remained lower after Friday’s report from the University of Michigan showed US inflation expectations unexpectedly rose, a hawkish factor for Fed policy.

European bond yields were mixed. The 10-year German bund yield rose +2.1 bp to 2.876%. The 10-year UK gilt yield fell -1.1 bp to 4.666%.

The German Feb CPI (EU harmonized) was revised downward to +0.5% m/m and +2.6% y/y from the previously reported +0.6% m/m and +2.8% y/y.

ECB Governor Holzmann said interest rates in the Eurozone are already at neutral levels, and he supports pausing ECB rate cuts next month. He added that a resurgence in inflation is the greater risk, and higher European spending could force the ECB to hike interest rates.

Handelsblatt reported Friday that German chancellor-in-waiting Merz reached an agreement with the Green party on a fiscal reform package for large investments in infrastructure and defense.

Swaps are discounting the chances at 53% for a -25 bp rate cut by the ECB at the April 15 policy meeting.

Stock indexes closed higher on Friday as a US government shutdown on March 15 appeared unlikely after Senate Democratic leader Schumer said Thursday night that he will not block the Republican continuing resolution (CR) to fund the government for 6 months. The House passed the bill on Tuesday, and the Senate was expected to vote later Friday afternoon.

Global equity markets garnered support from a rally in Chinese stocks to a 3-month high on signs of more policy support. Officials from the finance ministry, commerce ministry, the PBOC, and other government bodies plan to hold a press conference on Monday to announce measures to boost consumption.

Stocks were undercut by Friday’s report from the University of Michigan showed that US consumer sentiment in March fell to a more than two-year low, and long-term inflation expectations soared to a 32-year high.

The University of Michigan US Mar consumer sentiment index fell -6.8 to a 2-1/3 year low of 57.9, weaker than expectations of 63.0.

The University of Michigan’s US Mar 1-year inflation expectations indicator unexpectedly rose to a 2-1/3 year high of +4.9%, higher than expectations of no