BNN Bloomberg's closing bell update: Feb. 13, 2019
U.S. equities put in their fourth straight session of gains as optimism over trade negotiations countered some of the jitters that Senator Marco Rubio triggered when he announced a bill to tax buybacks on equal footing with dividends.
Rubio’s tweet Wednesday about his buyback proposal slowed an advance in the S&P 500 Index, but the benchmark still finished higher, even after Netflix dragged on the communication-services sector late in the day. The dollar gained and Treasuries edged lower as data showed U.S. inflation remained contained.
Equities have been climbing this week in part on news that President Donald Trump is open to extending a March 1 deadline to raise tariffs on Chinese products if the two sides are near an agreement. High-level talks between the U.S. and China are set for later this week. Also buoying stocks was news that Trump is closer to accepting a border spending deal, averting another government shutdown.
“Moving forward, we’re going to have to see a resolution to some of these big-picture items before we’ll see the markets make a clear move higher,’’ said Chris Gaffney, president of world markets at TIAA Bank in St. Louis.
Oil continued its rebound from a two-week low, after Saudi Arabia pledged to deepen output cuts, and held most of those gains even after U.S. crude stockpiles came in larger than anticipated. Energy shares led gainers on the S&P 500; utilities lagged.
The U.S. inflation numbers bolstered the Federal Reserve’s decision to be patient on raising interest rates. And with major central banks seemingly on pause or turning dovish, investor attention now appears firmly focused on the outlook for global trade and the chances of progress at the next round of talks between the U.S. and China in Beijing. Protectionist measures have been heaping pain on many large economies, some of which are also grappling with a slowdown in growth.
Shares in Shanghai surged on trade hopes, and the Stoxx Europe 600 Index rose for a third day. The euro weakened after a report showed industrial production across the 19-nation region is falling at the fastest pace since the financial crisis.
Here are some key events coming up:
Chinese Vice Premier Liu He is expected to join U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in high-level trade talks Thursday and Friday. Earnings season continues with reports from companies including Cisco, Vivendi, Nvidia, Nestle, Coca-Cola and Credit Suisse.
These are the main moves in markets:
The S&P 500 Index rose 0.3 per cent to a 10-week high as of 4:03 p.m. New York time. The Dow Jones Industrial Average gained 0.5 per cent; the Nasdaq 100 was little changed. The Stoxx Europe 600 Index rose 0.6 per cent to its highest in a week. The U.K.’s FTSE 100 Index rose 0.8 per cent to a four-month high. The MSCI Emerging Market Index fell 0.2 per cent.
The Bloomberg Dollar Spot Index rose 0.5 per cent to a six-week high. The euro decreased 0.5 per cent to US$1.1267. The British pound fell 0.3 per cent to US$1.285. The Japanese yen dropped 0.5 per cent to 111.00 per dollar.
The yield on 10-year Treasuries rose two basis points to 2.71 per cent. Germany’s 10-year yield fell one basis point to 0.12 per cent. Britain’s 10-year yield fell less than one basis point to 1.182 per cent.
The Bloomberg Commodity Index gained 0.1 per cent. West Texas Intermediate crude climbed 1.7 per cent to US$53.99 a barrel. Gold fell 0.4 per cent to US$1,306.20 an ounce, a two-week low.