Stocks win before profits; Oil drops from above: enveloping the markets

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(Bloomberg) – US stocks hit a new record high as traders braced for a series of earnings reports from tech heavyweights including Facebook Inc., keeping issues in mind. inflation and the growing risks of Covid-19.

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The consumer discretionary, energy and materials sectors led the S&P 500 to a record high. PayPal Holdings Inc. rose after the company said it was not pursuing the acquisition of Pinterest Inc., ending days of speculation over a potential $ 45 billion deal. Tesla Inc. has advanced after receiving an order for 100,000 cars from Hertz Global Holdings Inc. Still to come: America’s five biggest tech companies are expected to release their results, starting with Facebook on Monday.

“This year, major stock indexes have enjoyed robust earnings growth – the rising tide lifts every adage the boats have been in full force,” said Seema Shah, chief strategist of Principal Global Investors. “But as the economy slows down and market conditions become more difficult, selectivity will be key. Remaining overweight equities, with an emphasis on factors such as quality, will be increasingly important for investors looking to balance portfolios in the coming market environment. “

Oil slashed gains after hitting $ 85 a barrel for the first time since 2014, with traders focusing on upcoming negotiations between Iran and the European Union that could lead to a resumption of the nuclear deal from 2015.

Yields on shorter-dated Treasuries fell and the dollar rose slightly after Federal Reserve Chairman Jerome Powell signaled that inflation could stay higher for longer, fueling investor fears that Persistent price hikes don’t force policymakers to increase borrowing costs. Gold rose above $ 1,800 an ounce.

Global equities remained resilient despite risks from price pressures fueled by supply chain bottlenecks and rising energy costs. Treasury Secretary Janet Yellen is among those who advise the inflation picture to reflect temporary pain that will subside in the second half of 2022. Investors fear that a tightening of monetary policy to control inflation does not fuel volatility.

Traders are also monitoring an outbreak of the delta virus strain in China that is expected to worsen. The nation has sought to allay concerns about the slowing economy with a lengthy commentary in state media outlining how the government is managing risk and remaining confident in achieving its goals for the year.

The Stoxx Europe 600 index rose slightly. The basic resources sector rose as crude oil and metals rose earlier, while banks rose on the promising outlook from HSBC Holdings Plc.

Here are some events to watch this week:

  • Profits: Amazon, Apple, Facebook, Microsoft, Twitter, Samsung Electronics, China Vanke, PetroChina, Ping An Insurance Group

  • Australia CPI, Wednesday

  • US wholesalers’ inventories, US durable goods, Wednesday

  • Bank of Japan Monetary Policy Decision Briefing Thursday

  • ECB decision on rates, briefing by President Christine Lagarde, Thursday

  • US GDP, first jobless claims, Thursday

  • Joint meeting of G-20 finance and health ministers ahead of weekend leaders’ summit on Friday

For more market analysis, read our MLIV blog.

Some of the main movements in the markets:

Actions

  • The S&P 500 rose 0.5% at 4 p.m. New York time

  • The Nasdaq 100 rose 1%

  • The Dow Jones Industrial Average rose 0.2%

  • The MSCI World index rose 0.3%

Currencies

  • Bloomberg Dollar Spot Index rose 0.1%

  • The euro fell 0.3% to $ 1.1611

  • The British pound was little changed at $ 1.3765

  • Japanese yen fell 0.2% to 113.72 per dollar

Obligations

  • The yield on 10-year treasury bills was little changed at 1.63%

  • German 10-year yield fell one basis point to -0.11%

  • The UK 10-year yield was little changed at 1.14%

Merchandise

  • West Texas Intermediate crude fell 0.4% to $ 83.45 a barrel

  • Gold futures rose 0.7% to $ 1,808.10 an ounce

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