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U.S. Stocks Climb With Treasuries as Dollar Slides: Markets Wrap

U.S. stocks eked out a gain to finish at a fresh all-time high as gains in defensive shares offset declines sparked by Apple Inc. Treasuries rose and the dollar extended losses after a report from Politico that President Donald Trump is leaning toward Jerome Powell as the next Fed chairman.

The S&P 500 wiped out a slide of 0.5 percent to close higher for a fifth straight day. The Nasdaq Composite Index fell the most in three weeks with Apple pacing declines after a report that the iPhone maker was dialing back orders. The Cboe Volatility Index held above 10, but trimmed a jump of more than 15 percent. Ten-year Treasury yields fell to 2.31 percent and gold approached $1,290 per ounce.

American traders awoke to find the S&P 500 headed for its biggest drop since August as a host of negative headlines snapped a risk-on sentiment that had dominated in recent days. Investors sought the safest assets, from the Swiss franc to gold, amid concern over politics in New Zealand and Spain, a sharp drop in Hong Kong shares and the bad news from Apple. That sentiment faded as the U.S. day wore on, amid the prospect for higher corporate earnings and data showing firmness in the American labor market.

Terminal subscribers can read more on our markets blog.

Here are the main moves in markets:

Stocks

  • The S&P 500 Index rose less than 0.1 percent at the close in New York.
  • United Continental Holdings Inc. fell the most in eight years after the airline’s profit outlook disappointed investors.
  • EBay Inc. fell the most in two months after giving a lackluster profit forecast for the holiday quarter.
  • The Stoxx Europe 600 Index dropped 0.6 percent. 
  • The MSCI Asia Pacific Index dipped 0.2 percent.

Currencies

  • The Bloomberg Dollar Spot Index lost 0.2 percent.
  • The euro climbed 0.4 percent to $1.1833, the strongest in more than a week.
  • The British pound slipped 0.4 percent to $1.3156.
  • The Japanese yen rose 0.3 percent to 112.56 per dollar.

Bonds

  • The yield on 10-year Treasuries decreased three basis points to 2.31 percent.
  • Germany’s 10-year yield was little changed at 0.39 percent.
  • Britain’s 10-year yield decreased four basis points to 1.28 percent.

Commodities

  • West Texas Intermediate crude fell 1.3 percent to $51.36 a barrel.
  • Gold increased 0.4 percent to $1,286.32 an ounce.
  • Copper declined 0.3 percent to $3.1675 a pound.

    Read more: http://www.bloomberg.com/news/articles/2017-10-18/profits-buoy-equities-as-bonds-drop-dollar-swings-markets-wrap

    U.S. Stocks Surge, Dollar Rises on Trump Tax Plan: Markets Wrap

    U.S. stocks rallied, the dollar extended gains and Treasuries slumped on speculation President Donald Trump’s tax-cut plan will become law this year. Gold sank.

    The S&P 500 Index inched close to a record high as banks and tech shares surged on the prospect lower taxes will fuel economic growth. Small caps, a group with among the highest tax rates, jumped the most since March. The Bloomberg dollar index hit a six-week peak, and 10-year note yields climbed to the highest in two months. Gold fell below its 50-day average for the first time since July.

    The urgent effort by Trump and Congressional Republicans to pass tax cuts they say will spur growth and investment drove investor demand for assets that will benefit from gains in the world’s largest economy. Coupled with Federal Reserve Chair Janet Yellen’s hawkish tone in remarks on Tuesday that boosted the chances for a December interest-rate hike, rumblings over the tax plan revived trades that gained favor following Trump’s stunning win almost a year ago.

    “Tax reform will be crucial in both making America competitive again and possibly extending this aging economic recovery, but it won’t happen in a vacuum and interest rates are not going to sit idly by if growth and inflation truly respond to any fiscal boost,” Peter Boockvar, chief market analyst at The Lindsey Group, wrote in a note to clients Wednesday.

    The plan announcement is just the start of what’s expected to be a brutal fight in Congress, but equity investors were encouraged by several proposals, such as allowing companies to write off capital expenditures for five years. The dollar received a push from the prospect of capital inflows as companies take advantage of a proposed one-time repatriation tax. 

    “There’s the likelihood now that it may not be a tax reform, but we’ll likely get a tax cut, and the market likes a tax cut probably better than tax reform,” John Stoltzfus, chief market strategist at Oppenheimer & Co. in New York, said by phone. “Everybody likes a quick fix, and the market has shown for years it accepts kicking the can down the road.”

    Terminal subscribers can read more in our Markets Live blog.

    What to watch out for this week:

    • U.S. data on GDP and personal spending Thursday will provide further clues as to the potential Fed policy path.
    • The euro-area inflation rate may have accelerated a touch to 1.6 percent in September from 1.5 percent but the core will probably remain at 1.2 percent. The data is out on Friday.

    And here are the main moves in markets:

    Stocks

    • The S&P 500 rose 0.4 percent to 2,507.04. The Dow Jones Industrial Average added 56 points for a 0.3 percent increase.
    • The Russell 2000 soared 1.9 percent, the most in six months, to reach another record, while the Nasdaq 100 Index gained 1 percent.
    • The Stoxx Europe 600 Index advanced 0.4 percent to the highest since July.
    • The MSCI Emerging Market Index fell 0.3 percent, hitting the lowest in five weeks.

    Currencies

    • The Bloomberg Dollar Spot Index rose 0.6 percent to the highest since August. 
    • The euro dipped 0.4 percent to $1.1749, the lowest in six weeks. 
    • The British pound decreased 0.5 percent to $1.3393. 
    • The Swiss franc fell 0.4 percent to $0.9722, the weakest in six weeks.

    Bonds

    • The yield on 10-year Treasuries jumped seven basis points to 2.3032 percent, the highest in two months. 
    • Germany’s 10-year yield added six basis points to 0.468 percent, the highest in seven weeks. 
    • Britain’s 10-year yield climbed five basis points to 1.38 percent.

    Commodities

    • West Texas Intermediate crude rose 0.4 percent to $52.07, slipping after hitting a five-month high earlier in the session. 
    • Gold declined 0.8 percent to $1,283.59 an ounce, the weakest in five weeks.

    Asia

    • Japan’s Topix index slid 0.5 percent at the close in Tokyo. 
    • Australia’s S&P/ASX 200 Index declined 0.1 percent and South Korea’s Kospi index ended less than 0.1 percent lower.
    • Hong Kong’s Hang Seng Index climbed 0.5 percent.
    • The MSCI Asia Pacific Index fell 0.4 percent.
    • The Japanese yen sank 0.7 percent to 113.06 per dollar, the weakest in almost 11 weeks.

      Read more: http://www.bloomberg.com/news/articles/2017-09-26/yen-weakness-to-support-japan-stocks-after-yellen-markets-wrap

      Stocks in Asia Head Lower as Haven Rally Subsides: Markets Wrap

      Financial markets showed signs of stabilizing after a fresh trigger from North Korea had sent money into haven assets, with focus returning to comments from central bank policy makers.

      Stocks in Asia fell, though declines were modest, as gains in gold and the yen petered out. North Korea had injected a note of caution to markets on Monday after its foreign minister declared that the nation can shoot down U.S. warplanes. Focus remains on Chinese property developers, as one of the world’s most extreme stock rallies gets a reality check.

      North Korean Foreign Minister Ri Yong Ho described President Donald Trump’s recent comments as tantamount to a declaration of war. The White House denied it has declared war on Pyongyang, while China’s ambassador to the UN told Reuters the situation is "getting too dangerous."

      “This does represent a significant escalation in rhetoric and raises the risk of a tactical misstep,” said Tapas Strickland, a Sydney-based economist at National Australia Bank Ltd.

      A speech by Federal Reserve Chair Janet Yellen on Tuesday will be parsed as policy makers continue to disagree on whether to raise U.S. interest rates again this year. New York Fed President William Dudley argued the U.S. central bank should stick with its strategy of gradual monetary policy tightening, a view echoed by Yellen. Meanwhile, Chicago Fed President Charles Evans urged caution as did Minneapolis Fed President Neel Kashkari. Investors see a roughly 60 percent chance that rates will be increased again in December following moves in March and June.

      Terminal subscribers can read more in our Markets Live blog.

      What to watch out for this week:

      • Later in the week, Bank of England Governor Mark Carney speaks, as does soon-to-depart Fed Vice Chairman Stanley Fischer.
      • European Union chief Brexit negotiator Michel Barnier and U.K. counterpart David Davis begin their next round of negotiations.
      • Household spending last month in the U.S. probably posted the smallest gain since February as motor-vehicle sales shifted into a lower gear, economists forecast government figures to show.
      • The euro-area inflation rate may have accelerated a touch to 1.6 percent in September from 1.5 percent but the core will probably remain at 1.2 percent when data is out on Friday.

      Here are the main moves in markets:

      Stocks

      • Japan’s Topix index was slightly lower as of 11:05 a.m. in Tokyo. South Korea’s Kospi index fell and Australia’s S&P/ASX 200 Index were little changed.
      • Hong Kong’s Hang Seng Index was down 0.1 percent after slumping 1.4 percent on Monday as Chinese property developers tumbled on fresh mainland home curbs.
      • Futures on the S&P 500 Index fell 0.1 percent. The underlying gauge lost 0.2 percent, while the Nasdaq Composite Index declined 0.9 percent following a selloff in technology stocks.

      Currencies

      • The Bloomberg Dollar Spot Index was down less than 0.1 percent after climbing 0.4 percent to the highest in more than three weeks.
      • The yen was little changed at 111.65. It gained 0.2 percent on Monday.
      • The won fell 0.4 percent to 1,136.58 per dollar.
      • The euro was at $1.1860 after falling 0.9 percent.
      • The Australian dollar bought 79.44 U.S. cents. The New Zealand dollar dropped 0.3 percent, adding to a 0.9 percent slide on Monday.

      Bonds

      • The yield on 10-year Treasuries was at 2.22 percent, maintaining a three basis point drop on Monday.
      • Australia’s 10-year bonds yield fell three basis points to 2.77 percent.

      Commodities

      • Gold was steady at $1,311.26 an ounce, after jumping 1 percent on Monday.
      • West Texas Intermediate crude edged lower to $52.16 a barrel after rising 3.1 percent on Monday to the highest since April. Turkey threatened to shut down Kurdish crude shipments through its territory.

        Read more: http://www.bloomberg.com/news/articles/2017-09-25/havens-climb-on-north-korea-as-stocks-point-lower-markets-wrap