Saturday, July 24, 2021

business

Stocks hit records ahead of earnings; oil falls: Markets Wrap


U.S. stocks climbed to another all-time high as investors await second-quarter earnings starting this week to gauge whether corporate profits can support equity valuations. Treasury yields fluctuated as the U.S. sold debt.

Financials and real estate shares led the S&P 500 to a record, while the tech-heavy Nasdaq 100 was mostly little changed. Both indexes set their previous closing marks on Friday. The Stoxx Europe 600 gained for a second day and Asian equity indexes closed in the green.

The U.S. Treasury sold $58 billion of three-year notes at yields slightly higher than before the auction. A sale of $38 billion of 10-year notes was greeted by stronger demand. The dollar pared earlier gains against major peers.

"The biggest things on people's minds right now are the start of earnings season and the economic releases on the inflation front," said Eric Freedman, chief investment officer at U.S. Bank Asset Management Group.

Equities and bonds have rallied amid a decline in long-term interest rates and inflation expectations as central banks hold off on unwinding the support driving the recovery from the pandemic. Still, investors remain concerned about the spread of the delta variant and a slowdown in vaccination rates, while pondering when the Federal Reserve will start tapering stimulus.

"The question at the core of the movements in the 10-year Treasury's yield for most of this year has been whether economic re-openings stateside and around the globe will generate levels of longer lasting inflation for economies, central banks and markets to contend with or will the near-term inflation consumers and businesses are experiencing be transitory as economies transition to a post-Covid environment," John Stoltzfus, chief investment strategist at Oppenheimer & Co., wrote to clients.

Elsewhere, Asian stocks rose at the start of the week after China's central bank moved to boost liquidity by cutting the amount of cash most banks must hold in reserve to buttress economic growth.

The euro weakened and yields on core European bonds fell after European Central Bank President Christine Lagarde told investors to prepare for new guidance on monetary stimulus in 10 days. Oil was lower after its first weekly loss in seven amid an OPEC+ dispute over a production increase.

These are some of the main moves in financial markets:

Stocks:

- The S&P 500 rose 0.2% as of 1:29 p.m. New York time.

- The Nasdaq 100 rose 0.1%.

- The Dow Jones Industrial Average rose 0.4%.

- The MSCI World index rose 0.4%.

Currencies:

- The Bloomberg Dollar Spot Index rose 0.1%.

- The euro fell 0.2% to $1.1856.

- The British pound fell 0.1% to $1.3881.

- The Japanese yen fell 0.2% to 110.35 per dollar.

Bonds:

- The yield on 10-year Treasuries was little changed at 1.36%.

- Germany's 10-year yield was little changed at -0.29%.

- Britain's 10-year yield was little changed at 0.65%.

Commodities:

- West Texas Intermediate crude fell 1.1% to $73.74 a barrel.

- Gold futures fell 0.2% to $1,806.10 an ounce.

Published : July 13, 2021

By : Syndication Washington Post, Bloomberg · Vildana Hajric, Claire Ballentine