U.S. Stocks Limp to the Finish of a Healthy July: Markets Wrap

(Bloomberg) -- U.S. stocks slumped Monday despite a strong performance for the month, spurred by healthy corporate results and growing optimism in the strength of the global economy. Treasuries slid and the dollar added to its biggest monthly retreat since January.

The S&P 500 Index swung between gains and losses on light volume, but the gauge still posted its fourth straight monthly gain. European shares retreated for July. Copper rose to a two-year high and iron ore surged. The dollar pushed its decline this month to 2.6 percent, while the 10-year Treasury yield held near 2.30 percent. West Texas Intermediate crude traded above $50 a barrel for the first time since May.

U.S. stocks stumbled to the end of July after powering to fresh records amid evidence of resilient growth around the world. China’s official factory gauge showed continued expansion in June, even as it slipped amid government efforts to curb financial risks. Japan’s industrial output expanded in June, while numbers on Friday showed the U.S. economy accelerating in the second quarter.

“Global expansion dynamics are well underway,” analysts at Candriam Investors Group wrote in a report. “The European recovery is well on track and is leading to above-trend growth in 2017-18. This has led us to increase our profit earnings expectations for euro-zone equities. The economic news flow is starting to become more supportive in the U.S., while emerging markets are benefiting from a good economic momentum.”

Meanwhile, the slew of corporate earnings continues. Apple Inc., Tesla Inc., Berkshire Hathaway Inc. and Toyota Motor Corp. are all set to unveil results this week. HSBC’s second-quarter profit beat analysts’ estimates as outgoing Chief Executive Officer Stuart Gulliver boosted revenue while also trimming costs, and the lender said it will spend up to $2 billion buying back stock.

Terminal users can read more in our Markets Live blog.

In a packed week, here are some of the key events:

• There’s a stack of data on the U.S. economy due this week; highlights include jobs data that probably shows employers added about 180,000 workers in July. That’s Friday. Also watch out for manufacturing and automaker data on Tuesday.
• Brazil’s Congress votes on whether to put President Michel Temer on trial on Wednesday.
• The Bank of England announces a monetary-policy decision on Thursday, with investors expecting the key rate to remain at a record low 0.25 percent.
• Australia (Tuesday), India (Wednesday), Czech Republic and Ukraine (Thursday), and Romania (Friday) also announce rate decisions.
• The U.S. Energy Information Administration releases monthly reports Monday.

Here are some of the key moves in markets:

Stocks

• The S&P 500 closed down less than 0.1. at 2,470.3, but posted a gain of 1.9 percent in July.
• The Nasdaq 100 Index dropped 0.5 percent, paring its monthly advance to 4.1 percent.
• The Stoxx Europe 600 Index slipped 0.1 percent, for it second straight monthly loss.
• The MSCI All-Country World Index advanced 0.2 percent.
• The U.K.’s FTSE 100 Index increased less than 0.1 percent.
• The MSCI Emerging Market Index climbed 0.4 percent.

Currencies

• The Bloomberg Dollar Spot Index fell 0.3 percent and posted its fifth straight monthly drop.
• The euro rose 0.8 percent to $1.184.
• The British pound added 0.5 percent to $1.3196.

Bonds

• The yield on 10-year Treasuries declined less than one basis point to 2.29 percent.
• Germany’s 10-year yield was little changed at 0.54 percent.
• Britain’s 10-year yield rose one basis point to 1.23 percent.

Commodities

• West Texas Intermediate crude gained 1.1 percent to $50.25 a barrel, reversing earlier losses.
• Copper climbed 0.6 percent to $2.89 a pound, the highest in more than two years.
• Gold rose less than 0.1 percent to $1,270.25 an ounce.

Asia

• The Japanese yen increased 0.1 percent to 110.58 per dollar, the strongest in six weeks.
• Japan’s Topix index closed 0.2 percent lower after swinging between gains and losses. Australia’s S&P/ASX 200 Index rose 0.3 percent and South Korea’s Kospi index added 0.1 percent. Hong Kong’s Hang Seng Index added 1.1 percent. HSBC was among the biggest contributors to the advance.

--With assistance from Sid Verma and Garfield Reynolds

To contact the reporters on this story: Robert Brand in Cape Town at rbrand9@bloomberg.net, Jeremy Herron in New York at jherron8@bloomberg.net.

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Eric J. Weiner