Saturday, June 19, 2021

business

Stocks grasp for record, bonds rally ahead of CPI


U.S. stocks traded near record highs and bonds rallied as investors braced for a key inflation report that could provide clues on the direction of monetary policy.

The S&P 500 fluttered around its May 7 record closing level, with megacap technology and biotech stocks lifting the benchmark index. The 10-year Treasury yield retreated below 1.5% before an afternoon auction of the notes.

Equities have been trading in a tight range and Treasury yields have been easing in recent weeks as investors who believe accelerating inflation will be short-lived clash with those those who bet it will prove persistent enough to warrant tightening. For now, the Fed's dovish stance is calming the markets.

"Even if inflation comes out a little higher than Street expectations tomorrow, the Fed isn't going to change its path," said Esty Dwek, head of global market strategy at Natixis Investment Managers, said in a Bloomberg TV interview. "There's a lot of wait-and-see going on and really just thinking it would take a lot to really surprise markets."

Seven of the main 11 S&P 500 industry groups advanced, led by health-care stocks. Johnson & Johnson, Merck & Co., Pfizer and Eli Lily were among the biggest contributors to the broader index's advance. Biogen resumed a rally two days after getting regulatory approval for its Alzheimer's drug. Bitcoin rose more than 8%, trading above $36,000.

The 10-year U.S. Treasury yield declined as much as 6.3 basis points to 1.471%, which is below closing levels since March even as dealers prepared to underwrite an auction of $38 billion of the notes Wednesday afternoon. The 30-year bond's yield touched 2.148%, last seen March 1.

Meanwhile, a rally in commodities has stalled with global recovery remaining patchy, especially with the pandemic still spreading in the developing world. The Bloomberg Commodity Index, which shows returns on a basket of raw materials, fell 0.2%.

Shares edged up in China, where a measure of producer prices for May was at the highest since 2008 but consumer-price gains remained subdued. The nation is also considering imposing a cap on the price of thermal coal to contain high energy costs.

U.K. property developers posted some of the biggest losses in europe weeks before a stamp-duty exemption was due to expire and demand was seen moderating.

Stocks:

- The S&P 500 rose 0.1% as of 12:41 p.m. New York time.

- The Nasdaq 100 rose 0.4%.

- The Dow Jones Industrial average fell 0.1%.

- The MSCI World index was little changed.

Currencies:

- The Bloomberg Dollar Spot Index rose 0%.

- The euro was little changed at $1.2177.

- The British pound fell 0.3% to $1.4115.

- The Japanese yen fell 0.1% to 109.63 per dollar.

Bonds:

- The yield on 10-year Treasuries declined three basis points to 1.50%.

- Germany's 10-year yield declined two basis points to -0.24%.

- Britain's 10-year yield declined four basis points to 0.73%.

Commodities:

- West Texas Intermediate crude fell 0.7% to $70 a barrel.

- Gold futures were little changed.

Published : June 10, 2021

By : Syndication Washington Post, Bloomberg · Vildana Hajric