Treasuries fall as dollar strengthens with crude oilEarnings reports set to dominate market focus this week
Jonathan Golub of Credit Suisse and Deutsche Bank's Binky Chadha discuss the performance of financial stocks.
U.S. stocks added to all-time highs before the start of earnings season, while the dollar got a boost from policy steps in Asia that propelled Treasury yields past 2.50 percent for the first time in nine months.
The S&P 500 Index rose a sixth straight day to continue its unblemished start to the year, the Dow Jones Industrial Average hit a fresh record and the Nasdaq indexes eked out gains. The 10-year Treasury yield hit 2.55 percent after Bank of Japan cut purchases of long-dated bonds and Janus Henderson Group’s Bill Gross declared a bond bear market just ahead of a deluge of sovereign debt sales. China’s yuan dropped after the central bank adjusted its currency-fixing mechanism.
The torrid start to the year for risk assets continued Tuesday with investors confident that synchronous global growth will boost earnings around the world even as central banks move to withdraw monetary support. Corporate profit reports due this week from banks including JPMorgan Chase & Co. and Wells Fargo & Co. will set the tone as traders look for more reasons to chase stocks trading at or near record highs.
In Europe, equities climbed a fifth day as unemployment in the region fell to the lowest since early 2009. The pound fell as a reshuffle of senior U.K. government ministers descended into chaos.
Here are some of the main events to watch for this week:
U.S. inflation data are forecast to show price pressures remain muted, giving hawks little reason to argue for faster tightening.St. Louis Fed bank President James Bullard and head of the New York Fed Bill Dudley are among central bankers scheduled to speak.China producer and consumer prices data come Wednesday, while a reading on the country’s money supply is expected in coming days.Talks between South Korea and North Korea are set to take place Tuesday.Terminal users can read more in our markets blog.
These are the main moves in markets:
Stocks
The S&P 500 advanced 0.1 percent to 2,751.34 as of 4 p.m. in New York. Its sixth straight gain is the longest rally since October.The Dow rose 0.4 percent to 25,386 and the Nasdaq Composite gained 0.1 percent.The Stoxx Europe 600 Index increased 0.4 percent, hitting the highest in more than two years with its fifth consecutive advance.The MSCI All-Country World Index increased 0.3 percent, reaching the highest on record with its sixth consecutive advance.The MSCI Emerging Market Index fell 0.3 percent, the first retreat in more than a week and the largest decrease in two weeks.Currencies
The Bloomberg Dollar Spot Index increased 0.2 percent to the highest in more than a week.The euro fell 0.2 percent to $1.1939.The British pound declined 0.2 percent to $1.354.The Japanese yen jumped 0.5 percent to 112.587per dollar, the first advance in a week and the biggest increase in more than a week.Bonds
The yield on 10-year Treasuries jumped seven basis points to 2.55 percent, the highest since March.The yield on two-year Treasuries was little changed at 1.97 percent.Germany’s 10-year yield fell one basis point to 0.42 percent.Britain’s 10-year yield increased one basis point to 1.242 percent.Commodities
Gold futures fell 0.4 percent to $1,315 an ounce, the weakest in more than a week on the largest decrease in more than a month.West Texas Intermediate crude increased 1.9 percent to $62.92 a barrel, the highest in more than two years.— With assistance by Cecile Vannucci, and Sofia Horta E Costa
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