(Bloomberg) — U.S. stocks reclaimed an all-time high after three months, with the final leg coming on rising optimism for a trade deal with China. Treasuries slumped at the start of a a week packed with earnings and the Federal Reserve’s policy decision.
The S&P 500 took out its July record after President Donald Trump said the U.S. is ahead of schedule to sign part of the trade deal. Microsoft jumped to a after winning a Pentagon contract, while AT&T climbed following a board shuffle. Tiffany surged after LVMH said it held discussions with the jeweler. PG&E plunged on liability risk from California wildfires. The Stoxx Europe 600 rose even as banks slipped after HSBC’s disappointing earnings. The 10-year Treasury yield hit a six-week high.
Investors began the week with analysts predicting the Fed will trim rates by 25 basis points on Wednesday and then signal it’s done with easing for now. Fed Chair Jerome Powell has previously said the wider U.S. economy is in a good place, yet citing slowing global growth and uncertainty around trade as risk factors. After several corporate earnings reports last week seemed to underscore that view, Alphabet is set to release results on Monday.
Meanwhile, China said parts of the text for the first phase of a trade deal with the U.S. are “basically completed” following consensus on subjects including standards used by agricultural regulators. That followed a similar statement Friday from the U.S. side, with Presidents Donald Trump and Xi aiming to sign a pact in Chile next month. Yields on China’s 10-year notes jumped the most since April.
In the U.K., the pound steadied versus the euro after the European Union agreed to a Brexit deadline extension, easing the risk of leaving the bloc without a deal on Oct. 31. European bonds edged lower, while gilts were steady. An Asia-Pacific equities benchmark rose for the fifth gain in six sessions. Shares increased in Shanghai, with blockchain-related stocks climbing after Chinese President Xi Jinping hailed the technology.
Elsewhere, Argentine bonds fell after opposition candidate Alberto Fernandez secured victory in Sunday’s presidential election, with business-friendly incumbent Mauricio Macri conceding. WTI crude oil slipped after the biggest weekly advance in more than a month. Bitcoin jumped as much as 16% from Friday, before paring its gain by about one-half.
Here are some key events coming up this week:
Earnings include: Alphabet, Facebook, Pfizer, Airbus, Apple, Exxon Mobil, BP, PetroChina, Credit Suisse, Nomura and Macquarie Group.The Fed is expected to lower the main interest rate when policy makers decide on Wednesday. Futures have priced in about 23 basis points of reduction.U.S. economic growth is forecast to have slowed to 1.6% in the third quarter. GDP data are due Wednesday.The Bank of Japan sets policy on Thursday and Governor Haruhiko Kuroda will hold a news conference.Friday brings the monthly U.S. non-farm payrolls report.
These are some of the main moves in markets:
Stocks
The S&P 500 Index advanced 0.6% as of 9:55 a.m. New York time.The Nasdaq 100 jumped 0.6%, within points of its all-time high. The Dow Jones Industrial Average added 0.6%.The Stoxx Europe 600 Index added 0.3%.The U.K.‘s FTSE 100 Index decreased 0.1%.The MSCI All-Country World Index gained 0.1%.The MSCI Emerging Market Index jumped 0.5%.
Currencies
The Bloomberg Dollar Spot Index decreased 0.1%.The euro climbed 0.2% to $1.1101.The British pound was little changed at 86.389 pence per euro.The Japanese yen was little changed at 108.72 per dollar.
Bonds
The yield on 10-year Treasuries advanced six basis points to 1.86%.The yield on two-year Treasuries advanced four basis points to 1.66%.Britain’s 10-year yield decreased one basis point to 0.673%.Japan’s 10-year yield climbed one basis point to -0.122%.
Commodities
West Texas Intermediate crude rose 0.2% to $56.77 a barrel.Gold futures decreased 0.8% to $1,493.70 an ounce.Iron ore sank 1.4% to $84.40 per metric ton.
–With assistance from Adam Haigh and Robert Brand.
To contact the reporter on this story: Claire Ballentine in New York at [email protected]
To contact the editors responsible for this story: Jeremy Herron at [email protected], Todd White
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