BNN Bloomberg's closing bell update: Feb. 5, 2020
U.S. stocks rose for a third day, while Treasuries slumped on speculation efforts will succeed at minimizing the economic impact from the coronavirus. Crude oil rallied after tumbling into a bear market.
The S&P 500’s three-day gain topped 3 per cent, pushing the equity benchmark toward an all-time high. Tech shares that led the advance lagged behind, given the still-uncertain economic impact from the deadly virus. Sentiment got a boost overnight after a string of reports on possible vaccines, but the World Health Organization later said there are no proven therapeutics. Treasuries retreated, sending 10-year yields above 1.63 per cent, even as more quarantines were announced in an effort to control the virus.
West Texas crude headed for its first gain in six sessions. Havens including the yen and Swiss franc slipped. The dollar edged higher as data showed U.S. firms added more jobs than economists’ forecasts in January.
While U.S. stocks logged solid gains, sentiment swung wildly on virus headlines that offered varying degrees of optimism the spread will be contained. More central banks signaled a willingness to act if the virus undermines demand, inflation and financial markets, driving demand for riskier assets. Better-than-forecast corporate earnings also continued boost equities.
“The market is shrugging it off. You can see that the effort is there and the market is saying that this isn’t going to break out into a pandemic,” Michael Pytosh, chief investment officer of equities at Voya Investment Management, said by phone. “It’s not going to cause some cataclysmic medical problem in the world.”
Here are some key events coming up:
- Democrats will release further results on the Iowa caucuses, which so far signal Pete Buttigieg as a top early presidential contender from the party.
- U.S. President Donald Trump looks set for acquittal on Wednesday in the Senate’s impeachment trial.
- The Reserve Bank of India’s interest rate decision is due Thursday.
- German factory orders for December are due Thursday, followed by industrial production on Friday.
- The U.S. employment report for January is set for Friday release.
And these are the main moves in markets:
- The S&P 500 Index climbed 0.9 per cent as of 2:34 p.m. New York time.
- The Nasdaq 100 Index added 0.1 per cent.
- The Stoxx Europe 600 Index gained 1.2 per cent.
- The MSCI Asia Pacific Index rose 0.6 per cent.
- The Bloomberg Dollar Spot Index gained 0.2 per cent.
- The British pound fell 0.4 per cent to US$1.2974.
- The euro declined 0.4 per cent to US$1.1.
- The Japanese yen weakened 0.2 per cent to 109.75 per dollar.
- The yield on 10-year Treasuries rose four basis points to 1.64 per cent.
- Britain’s 10-year yield climbed four basis points to 0.6 per cent.
- Germany’s 10-year yield increased three basis points to -0.37 per cent.
- West Texas Intermediate crude increased 3.4 per cent to US$51.45 a barrel.
- Copper rose 1.4 per cent to US$2.578 a pound.
- Gold added 0.2 per cent to US$1,556.47 an ounce.