BNN Bloomberg's mid-morning market update: July 16, 2019
Treasuries slumped and the U.S. dollar rallied after solid U.S. retail sales and factory output data added to signs the world’s largest economy is holding up. Stocks fell as traders assessed mixed results from banks.
Benchmark 10-year yields halted a two-day slide, while the greenback advanced against most major currencies. The S&P 500 Index dropped from a record high as JPMorgan Chase & Co.’s disappointing lending outlook offset better-than-estimated results in Goldman Sachs Group Inc.’s trading unit. Oil traded near $60 a barrel as U.S. crude inventories were forecast to fall.
Benchmark 10-year rates surge after economic data
Traders pushed down the value of bonds as the data underscored Federal Reserve Chairman Jerome Powell’s view that consumer spending and finances remain healthy amid a tight labor market that’s been supporting the expansion. That strength may complicate the debate for policy makers as they gather July 30-31 to chart their course amid growing headwinds from slowing global growth to trade tensions.
“Retail sales have really been ebbing and flowing but it’s good to see this kind of strength especially in the current trade environment we’re in,” Mike Loewengart, vice president of investment strategy at E*TRADE Financial. “As we kick off earnings season, this is an important indicator of retail health and could give insight into what’s to come.”
Here are some key events coming up:
Bank of America Corp. and Taiwan Semiconductor are among companies due to report results this week.
Monetary policy decisions are due in Indonesia, South Korea and South Africa on Thursday.
These are the main moves in markets:
- The S&P 500 Index fell 0.1 per cent to 3,011.05 at 9:30 a.m. in New York.
- The Stoxx Europe 600 Index jumped 0.3 per cent.
- The MSCI Asia Pacific Index dipped 0.2 per cent.
- The Bloomberg Dollar Spot Index increased 0.3 per cent.
- The euro declined 0.4 per cent to $1.1214.
- The British pound sank 0.8 per cent to $1.242.
- The Japanese yen dipped 0.3 per cent to 108.24 per dollar.
- The yield on 10-year Treasuries gained four basis points to 2.13 per cent.
- Germany’s 10-year yield climbed one basis point to -0.24 per cent.Britain’s 10-year yield increased one basis point to 0.812 per cent.
- The Bloomberg Commodity Index declined 0.4 per cent.
- West Texas Intermediate crude climbed 0.1 per cent to US$59.65 a barrel.
- Gold dipped 0.2 per cent to US$1,410.70 an ounce.
--With assistance from Adam Haigh, Samuel Potter, Laura Curtis and Yakob Peterseil.