U.S. Stocks Boosted by Oil Rally as Dollar Slips: Markets Wrap

(Bloomberg) -- U.S. stocks added to all-time highs as oil jumped above $47 a barrel, while the dollar’s rally faltered as markets showed resilience in in the face of Washington political wrangling.

The S&P 500 Index edged higher, enough to claim a second closing record this week, as markets looked past President Donald Trump’s firing of FBI Director James Comey. Energy shares led gains as crude surged almost 4 percent. The greenback fell for the first drop in three days as Federal Reserve Bank of Dallas President Robert Kaplan cast doubt on the pace of rate hikes. Treasuries slipped, while gold ended the longest run of losses since October. Emerging-market equities rose to the highest in almost two years.

Investors focused on oil’s rebound and corporate profits that signal the global economy is on firming footing. While Washington focused on the firing’s political implications, the impact on Trump’s policy agenda was deemed largely remote. The turmoil comes as political risks ease in Europe and corporate earnings suggest the global economy is on the mend.

Read more on Trump’s dismissal of Comey here.

“All in all, this does not support the view that the U.S. Trumpflation trade faces an easy road ahead of it,” Michael Every, head of financial markets research at Rabobank Group in Hong Kong, wrote in a note. “It underlines that real surprises can pop up out of the box at any time right now.”

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Here’s what investors will be scrutinizing:

• Earnings are expected from companies including Deutsche Telekom AG and Snap Inc. Toyota Motor Corp. and SoftBank Group Corp. posted results after the close of Japanese markets.
• The Bank of England on Thursday publishes its interest-rate decision and quarterly Inflation Report.

Here are the main moves in markets:

Stocks

• The S&P 500 rose 0.1 percent to 2,399.64 at 4 p.m. in New York.
• Boeing Co. fell 1.3 percent and Walt Disney Co. lost 2.2, leading the Dow Jones Industrial Average to a 0.2 percent slide.
• The CBOE Volatility Index edged toward 10, near a 24-year low.
• Emerging-market equities rose for a third day, pushing the MSCI index to the highest since June 2015.
• The Stoxx Europe 600 ended higher 0.2 percent, add to its highest close since August 2015.

Currencies 

• The Bloomberg Dollar Spot Index lost 0.1 percent after climbing 0.4 percent Tuesday, amid subdued trading as focus shifted away from the greenback.
• The euro slipped to $1.0867, while the pound was little changed at $1.2931.

Bonds

• The yield on 10-year Treasury notes rose one basis point to 2.41 percent after a soft auction of the notes.
• Benchmark German yields dropped one basis points to 0.422 percent, while French yields were down two basis points to 0.843 percent.

Commodities

• Gold futures climbed the most in more than two weeks amid uncertainties fueled by North Korea’s reported plans for a nuclear test. Bullion added 0.2 percent to settle at $1,218.909.00 an ounce, rebounding from five days of declines.
• West Texas oil jumped 3.4 percent to settle at $47.33 a barrel, resuming gains after dropping 1.2 percent on Tuesday.

--With assistance from Moxy Ying Eddie van der Walt Stephen Spratt and Adam Haigh

To contact the reporter on this story: Robert Brand in Cape Town at rbrand9@bloomberg.net.

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Samuel Potter