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U.S. Stocks Add to Records; Oil Tumbles on OPEC: Markets Wrap


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U.S. stocks rose to fresh records and the dollar strengthened as retailer results boosted confidence in the American consumers’ ability to jump start economic growth. Oil sank from a five-week high after OPEC extended plans to limit production without deepening the cuts.

The S&P 500 Index pushed its longest rally since February to six days as Best Buy Co. and PVH Corp. results topped estimates and the Bloomberg Consumer Comfort Index signaled optimism among U.S. shoppers. The dollar steadied in the wake of Federal Reserve minutes showing officials unperturbed by recent signs of slower economic growth. U.S. crude lost more than 4 percent to slide below $50. China’s yuan strengthened the most in four months.

Click here to follow the TOPLive blog on the OPEC meeting in Vienna.

The latest earnings reports bolstered a retail group that’s been hit by struggles at mall-based stores and signs that wages haven’t been rising fast enough to spark a meaningful surge in spending. They added to risk appetite after Fed policy makers indicated recent weakness in growth is transitory. The bullish sentiment was limited among stock investors in Europe, where some markets were closed today for the Ascension holiday.

Read our Markets Live blog here.

And here are the main movers:

Stocks

  • The S&P 500 rose 0.4 percent to a record 2,415 at 4 p.m. in New York. It’s rallied more than 2.5 percent in the past six sessions.
  • The Nasdaq Composite and Nasdaq 100 indexes also closed at records, while the Dow Jones Industrial Average added 0.4 percent to end 0.2 percent short of its March 1 high.
  • Best Buy surged 22 percent, the most since 2001, and PVH jumped 4.9 percent to pace gains in retailers. Railroad operators also rallied, leading transportation shares higher.
  • The Dow Jones Industrial Average climbed to 21,085 as it bears down on its March 1 closing record. 
  • The Stoxx Europe 600 ended little changed, while emerging-market equities rallied 0.7 percent.

Commodities 

  • West Texas Intermediate crude sank 4.8 percent to settle at $48.90 a barrel in New York, after touching the highest level in more than a month.
  • Gold futures rose 0.3 percent to $1,259.70 an ounce.

Currencies

  • The Bloomberg Dollar Spot Index edged higher after earlier touching the lowest level since November.
  • The euro was virtually unchanged at $1.1218. The British pound fell 0.1 percent to $1.2960.

Bonds

  • The yield on 10-year Treasury notes was little changed at 2.25 percent after losing three basis points on Wednesday. 
  • German 10-year yields fell four basis points to 0.362 percent.
  • Japan’s sovereign yield curve bear-steepened after the nation’s auction of 40-year bond sale met weaker-than-expected demand.

Read more: http://www.bloomberg.com/news/articles/2017-05-24/asia-stocks-look-mixed-as-dollar-slips-on-fed-markets-wrap


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U.S. Stocks Rise to Record, Dollar Slips on Fed: Markets Wrap


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U.S. stocks climbed to fresh records, while the dollar slipped with Treasury yields as minutes from the Federal Reserve’s last meeting showed officials unperturbed by recent signs of economic weakness. Crude slipped.

The S&P 500 Index completed its rebound from the biggest selloff the year a week ago, as Fed officials signaled the economy remains on track. The Nasdaq 100 Index also closed at a record. The dollar slumped toward a November low and Treasuries rose as a “few” said inflation remained muted. Metals retreated after Moody’s Investors Service reduced its rating on China. Crude fell slightly after five days of gains.

The Fed statement points toward a hike as soon as the meeting in mid-June, though FOMC voters added the caveat that “it would be prudent” to wait for evidence that a recent slowdown in economic activity had been transitory. Earlier Wednesday, Fed Bank of Philadelphia President Patrick Harker said June “is a distinct possibility” for the U.S. central bank’s second interest-rate increase of 2017. 

Prior to the release of the minutes, markets were largely in a holding pattern, with U.S. equities little changed near record levels and the dollar flat. Investors quickly moved on after Moody’s action on China briefly rattled Asian markets.

Read our Markets Live blog here.

Here are the main moves in markets:

Stocks

  • The S&P 500 rose 0.2 percent to 2,404.28 at 4 p.m. in New York. The Dow Jones Industrial Average rose above 21,000 to the highest since May 8.
  • The Stoxx Europe 600 Index ended with a gain on 0.1 percent.
  • The MSCI Emerging Market Index added nearly 0.3 percent.

Currencies

  • The Bloomberg Dollar Spot Index fell 0.3 percent to near the lowest since November.
  • The pound was down slightly at $1.2931 for a third straight day of losses. The euro was essentially unchanged at $1.1176.

Commodities

  • Nickel slumped 2.6 percent and copper fell 0.9 percent. Iron ore futures declined 6.5 percent. China is the top user of materials.
  • West Texas oil dropped 11 cents to settle at $51.36 a barrel, following a five-day advance. Investors shrugged off declining U.S. stockpiles as they held their breath ahead of OPEC’s meeting on Thursday.
  • Gold fell 0.3 percent to $1,251 an ounce, after dropping 0.8 percent on Tuesday.

Bonds

  • The yield on 10-year Treasury notes fell three basis points to 2.25 percent. Bond prices fell during the previous four days.
  • Yields on benchmark French and German benchmark bonds were little changed.

Read more: http://www.bloomberg.com/news/articles/2017-05-23/stocks-in-asia-point-higher-as-dollar-holds-gain-market-wrap


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Oil Jumps as Saudis, Russia Favor Extending Output Deal to 2018


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Oil rallied after Saudi Arabia and Russia stoked expectations that production cuts might be extended for nine months.

Futures closed at their highest in more than two weeks. While output curbs that started Jan. 1 are working, global inventories aren’t yet at the level targeted by OPEC and its allies, Saudi Energy Minister Khalid Al-Falih said Monday in Beijing alongside his Russian counterpart, Alexander Novak. The ministers agreed the deal should be extended through the first quarter of 2018 at the same volume of reductions, they said.

"When Saudi Arabia and Russia come out together it sends a very strong signal to the market," Mike Wittner, head of commodities research at Societe Generale SA in New York, said by telephone. "With these two countries behind the extension of the accord, chances are very high that they will get all of OPEC behind it."

The largest of the 24 producers that agreed to cut supply for six months are reaffirming their commitment to the deal amid growing doubts about its effectiveness so far. An increase in Libyan output, together with a surge in U.S. production and signs of recovery in Nigeria, may undercut OPEC’s strategy to re-balance the market and boost prices.

West Texas Intermediate for June delivery climbed $1.01, or 2.1 percent, to $48.85 a barrel on the New York Mercantile Exchange. It was the highest close since April 28. Total volume traded was about 38 percent of the 100-day average.

Brent for July settlement rose 98 cents, or 1.9 percent, to $51.82 a barrel on the London-based ICE Futures Europe exchange. It was also the highest close since April 28. The global benchmark crude ended the session at a $2.66 premium to July WTI.

Money managers have cut their bets on rising WTI and Brent prices back to where they were before OPEC agreed to pare output.

That will "set the stage for the rally," Tamar Essner, a New York-based energy analyst at Nasdaq Inc., said by telephone. "Nobody wants to be short going into the OPEC meeting."

Extending the cuts at already agreed-upon volumes is needed to reach the goal of trimming global stockpiles to the five-year average, the energy ministers of the world’s biggest oil producers said in a joint press conference. They will present their view at a Vienna summit of OPEC and other exporters on May 25.

“Preliminary consultations show that everybody is committed” to the output agreement, said Novak. “I don’t see reasons for any country to quit.”

OPEC members agreed in November to cut output by 1.2 million barrels a day. Several non-members, including Russia, reached an accord in December to contribute a combined 600,000 barrels a day of reductions.

Not everyone is on board yet. Kazakhstan, the biggest producer in the former Soviet Union after Russia, isn’t ready to join an extended accord automatically, its Energy Minister Kanat Bozumbayev said Monday, according to Interfax. The Central Asian nation will discuss its level of participation at the Vienna gatherings on May 24 and 25, the news service reported, citing the minister.

Powerful Signal

"It’s a powerful signal when Saudi Arabia and Russia come out together," Essner said. "They are the most important countries taking part and without their agreement you would not be able to get other countries to come onboard."

While OPEC and allies are cutting production, U.S. output has risen to the highest level since August 2015 and is poised to climb further as explorers stage the longest shale drilling ramp-up since 2011.

"This is bullish because they are going to extend the cuts longer than was expected," Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $3.4 billion, said by phone. "It’s also bullish for oil producers here. They will keep investing, drilling and building pipelines in the U.S."

Oil-market news:

  • Libya is ratcheting up oil output with less than two weeks to go before the OPEC meeting.
  • Crude output at major U.S. shale plays is projected to rise to around 5.4 million barrels a day in June, highest since May 2015, according to EIA’s monthly Drilling Productivity Report
  • Brazil oil giant Petroleo Brasileiro SA is taking advantage of a drop in borrowing costs to sell dollar-denominated bonds.

Read more: http://www.bloomberg.com/news/articles/2017-05-15/oil-halts-gains-as-more-u-s-rigs-counter-opec-cut-deal-report