Stock Rally Gains Momentum on Risk Bet, Bonds Fall: Markets Wrap
Bloomberg – U.S. stocks rose for a third day and Treasuries slumped anew as the rebound in risk assets from the trade-fomented sell-off continued, even as markets remained exposed to fresh tariff headlines.
The S&P 500 headed for the biggest three-day rally in four months, boosted in part by solid earnings from Cisco Systems Inc. and Walmart Inc. along with strong housing data. Battered tech led the rally. Though, trade tensions remained in the forefront as the Trump administration threatened to blacklist China’s Huawei Technologies Co. and Walmart warned tariffs would lead to higher consumer prices. The 10-year yield topped 2.4% and the dollar strengthened.
“This has become a pattern where you get a big aggressive statement from the administration that might impact trade and then the market reacts aggressively as it did on Monday and then it seems to back off,” Chicago-based Susan Schmidt, head of U.S. equities at Aviva Investors, said in an interview. “Business is still doing well. I think if the market can stay focused on the facts and the data, then I think the market will hold.”
The rally in risk assets pushed to a third day even as trade tensions between major economies festered and growth fears dragged on. Strong economic data and earnings, along with hints from the Trump administration that it may be willing to compromise on trade has helped stocks rebound from the battering they took as the tariff battle with China flared. But the headlines have come fast and furiously, most recently President Donald Trump signed an order that’s expected to restrict Chinese telecommunications firms from selling in the U.S.
Elsewhere, the pound dropped for a ninth day versus the euro — the longest losing streak since 2000 — as U.K. Prime Minister Theresa May faced a new threat to oust her. Emerging market shares fell for the third time in four days.
Here are some notable events coming up this week:
Nvidia is among companies reporting earnings this week.Here are the main market moves:
The S&P 500 Index rose 1.3% as of 11:49 a.m. New York time. The Stoxx Europe 600 Index advanced 1.3%. The U.K.’s FTSE 100 Index gained 0.8%. The MSCI Emerging Market Index dipped 0.3%. The MSCI Asia Pacific Index decreased 0.5%.
The Bloomberg Dollar Spot Index gained 0.3% to the highest in three weeks. The euro dipped 0.2% to $1.1184, the weakest in more than a week. The British pound decreased 0.4% to $1.2796, reaching the weakest in three months. The Japanese yen fell 0.3% to 109.91 per dollar.
The yield on 10-year Treasuries climbed three basis points to 2.40%. Britain’s 10-year yield declined one basis point to 1.059%, the lowest in more than six weeks. Germany’s 10-year yield gained less than one basis point to -0.10%, the biggest advance in two weeks.
West Texas Intermediate crude increased 2.1% to $63.29 a barrel. Gold fell 1% to $1,285.30 an ounce.