US jobless claims edged higher last week but remain low, suggesting that hiring will remain robust for the near term. Continuing claims, however, rose to the highest level in more than three years. The uptrend in continuing claims is considered a sign that more workers are struggling to find new jobs.

Trump expresses reluctance to impose new tariffs on China exports. “We have one very big power over China, and that’s tariffs, and they don’t want them,” the president said in a TV interview. “And I’d rather not have to use it. But it’s a tremendous power over China.”

US stocks rallied to a record high on Thursday. The S&P 500 rose 0.5% to 6,118.71, the first time it’s finished at a record level since Dec. 6. But equities are now the most expensive relative to government bonds in more than 20 years, based on the difference between the forward earnings yield for the S&P less the 10-year Treasury yield. The gap has dropped into negative terrain, the lowest since 2002.

BlackRock chief Larry Fink says Treasury yields could surge to the highest level in over two decades due to inflation. “There’s a probability we could see the 10-year over 5%, maybe even 5.5%. That would shock the equity market,” he says.” The 10-year yield closed at 4.65% yesterday.

Japan lifted. interest rates to the highest level since 2008. The Bank of Japan noted that wages continued to rise and that underlying inflation has been gradually increasing toward 2%. Headline consumer inflation in December reached its highest pace since January 2023 at 3.6%, year over year, while core inflation rose to a 16-month high of 3%.

Eurozone business activity rebounded in January, posting the first month of expansion since August, according to the Eurozone Composite PMI Output Index, a survey-based GDP proxy. The growth, however, was marginal. “The kick-off to the new year is mildly encouraging. The private sector is back in cautious growth mode after two months of shrinking,” says Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.