Stocks Rise as Trade Tensions Ease; Dollar Drops: Markets Wrap

By Randall Jensen / March 07, 2018 / www.bloomberg.com / Article Link

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U.S. stocks rose for a third day as signs mounted that President Donald Trump may still be assessing the most severe protectionist policies. The dollar declined against peers.

The S&P 500 advanced as comments by the president’s allies -- including House Speaker Paul Ryan, White House economic adviser Gary Cohn and Senator David Perdue -- have added to pressure on Trump to ease off implementing steep tariffs on steel and aluminum. During a news conference Tuesday, Trump didn’t back down from his tough trade talk. Chipmakers rallied after a positive research note from Goldman Sachs, while materials producers gained amid a rise in metals prices.

Investors remained focused on the potential tariffs that have caused America’s largest trading partners to warn of a backlash. An apparent diplomatic breakthrough on the Korean Peninsula added to risk-on sentiment. Treasuries were flat after CVS Health Corp. kicked off the third largest corporate-debt financing ever.

“Last year was a very unvolatile year, that was abnormal -- normal is more volatility,” said Stephen Lee, a founding partner at Pennsylvania-based Logan Capital Management, which manages $1.9 billion. “You have to go through the knee jerk reactions, then step back and say, ‘Well is this a problem’? This tariff issue, it seems there’s a lot of noise, but our experience is with any sort of legislative thing it takes longer to get through.”

Meanwhile, emerging-market stocks rose after five days of declines, and Europe’s peripheral bonds advanced. Italian stocks advanced alongside the country’s bonds as the potentially lengthy process of forming a new government got under way.

Terminal users can read more in our markets blog.

Here are some key events coming up this week:

The Chinese People’s Political Consultative Conference runs through March 15 and overlaps with the National People’s Congress meetings in Beijing, through March 20.

Australia GDP data is due Wednesday.

The ECB isn’t expected to change policy on Thursday, but the Governing Council may discuss a change to pave the way for the end of quantitative easing.

BOJ monetary policy decision and briefing on Friday.

U.S. monthly payrolls data come Friday.

These are the main moves in markets: