BNN Bloomberg's mid-morning market update: June 11, 2019
U.S. stocks extended their winning streak, joining a global rally in riskier assets amid optimism on the outlook for trade talks and speculation U.S. monetary policy will be supportive. Treasuries were steady.
The S&P 500 Index headed to its sixth consecutive advance as durable-goods makers led gains. Mining and automobile shares pulled the Stoxx Europe 600 Index higher. In Asia, China equities outperformed after news that local governments may spend more on infrastructure helped offset President Donald Trump’s threat to raise tariffs again if President Xi Jinping doesn’t meet with him at the Group of 20 summit at month’s end. The dollar edged higher.
Sentiment has turned optimistic after a horrific month of May for global equity markets, with investors looking to the G-20 summit in Japan as the next possible site for a breakthrough in the trade dispute between the world’s two largest economies. As traders have added bets on lower U.S. interest rates, Trump stepped up his criticism of Fed policy in a tweet Tuesday, calling borrowing costs “way too high” amid “VERY LOW INFLATION.”
“The market will be a little volatile going into the G-20 just as you hear whispers around how trade negotiations are likely to unfold,” Caleb Silsby, Whittier Trust chief portfolio manager, told Bloomberg TV. It’s likely the market has priced in a “fairly decent resolution” on trade so any disruption would lead to increased volatility again, Silsby said.
Elsewhere, Mexico’s peso stabilized after posting its best day in almost a year following the country’s accord with the U.S. late Friday. The onshore yuan recovered after closing at its weakest level of the year. Emerging-market stocks and currencies both gained. Oil climbed toward $54 a barrel in New York.
Here are some key events coming up:
The U.S. releases consumer prices for May on Wednesday. ECB President Mario Draghi speaks at a conference in Frankfurt on Wednesday. The race to succeed Theresa May heats up with the first Conservative Party leadership ballot Thursday. Euro-area finance ministers meet in Luxembourg Thursday. On the agenda: financial penalties for Italy over its debt load, and the euro-area budget. China and the U.S. release industrial production, retail sales data Friday.
And these are the main moves in markets:
The S&P 500 Index rose 0.7 per cent as of 9:44 a.m. New York time. The Stoxx Europe 600 Index increased 0.9 per cent, in the sixth gain in seven sessions. Germany’s DAX Index rose 1.4 per cent. The Shanghai Composite Index jumped 2.6 per cent on the biggest surge in more than a month. The MSCI Emerging Markets Index climbed 1% to the highest in more than a month.
The Bloomberg Dollar Spot Index increased 0.1 per cent. The Japanese yen decreased 0.2 per cent to 108.66 per dollar. The onshore yuan climbed 0.3 per cent, the biggest increase in almost eight weeks. The MSCI Emerging Markets Currency Index gained 0.3 per cent.
The yield on 10-year Treasuries was little changed at 2.15 per cent. Germany’s 10-year yield fell two basis points to -0.24 per cent. The U.K.’s 10-year yield rose one basis point to 0.84 per cent.
Gold fell 0.3 per cent to US$1,324.46 an ounce. West Texas Intermediate crude climbed 0.6 per cent to US$53.56 a barrel.