U.S. Stocks Rally as Dollar Gains, Treasuries Slip: Markets Wrap

(Bloomberg) -- U.S. equities rose to the highest in almost a month as investors set aside concern about escalating trade tensions and rising political tension abroad to focus on the coming earnings season. The dollar gained versus major peers and Treasuries retreated.

The S&P 500 Index climbed for a third day and the Dow Jones Industrial Average popped through key technical levels. Miners and energy producers took the Stoxx Europe 600 Index to a fifth consecutive advance, the longest winning streak since March. The MSCI Asia Pacific Index jumped the most in a month.

The pound erased gains after pro-Brexit official Boris Johnson quit as U.K. foreign secretary throwing the U.K. government into turmoil over negotiations to leave the European Union. The dollar strengthened against most major peers. The Turkish lira retreated after President Recep Erdogan named his son-in-law finance minister. The Chinese yuan rebounded after its fourth weekly decline.

The start of earnings season this week may divert some attention away from the trade war that’s kept global stocks under pressure, while data out Friday supported sentiment. The U.S. jobs report showed another month of gains in excess of 200,000, while German industrial production beat all estimates for May. Those signs of strength contrasted with protectionist tensions after China retaliated against U.S. tariff increases.

“The markets, especially after the report on unemployment last week, seem to be pretty comfortable looking ahead and getting all the jitters about the trade war away,” Omar Aguilar, chief investment officer for equities at Charles Schwab Investment Management, said by phone. “Having the market paying more attention to earnings and fundamentals is clearly a good sign.”

Terminal users can read more in Bloomberg’s Markets Live blog.

These are some events to look out for this week:

• Chinese trade data due at the end of the week will probably show slightly slower export growth, after early indicators pointed to softer overseas demand and weaker export orders, Bloomberg Economics said. China releases June PPI and CPI on Tuesday, both of which should show a pickup.
• The most noteworthy U.S. data is the June inflation report on Thursday, which consensus expects will show both headline and core price growth picking up. There’s another deluge of Treasury debt sales too, with a total $156 billion of notes and bills offered.
• Earnings season gets going with JPMorgan Chase & Co. and Citigroup among the largest companies due to give results, as well as India’s Infosys Ltd.

Here are the main market moves:

Stocks

• The S&P 500 rose 0.9 percent to 2,784.28 as of 4 p.m. in New York, the highest close since June 12.
• The Dow added 321 points to 24,777.51, a level last seen on June 18.
• The Stoxx Europe 600 Index rose 0.6 percent, hitting the highest in more than two weeks.
• The MSCI All-Country World Index increased 0.9 percent to the highest in almost three weeks.
• The MSCI Emerging Market Index advanced 1.4 percent on the largest gain in more than a week.
• The MSCI Asia Pacific Index surged 1.3 percent.

Currencies

• The Bloomberg Dollar Spot Index rose 0.1 percent.
• The euro fell 0.1 percent to $1.1736.
• The British pound fell 0.5 percent to $1.3215.
• The Japanese yen slid 0.4 percent to 110.852 per dollar.

Bonds

• The yield on 10-year Treasuries gained four basis points to 2.86 percent, the highest in a week.
• Germany’s 10-year yield increased three basis points to 0.32 percent.
• Britain’s 10-year yield advanced five basis points to 1.312 percent.

Commodities

• The Bloomberg Commodity Index was little changed after touching the highest a week.
• West Texas Intermediate crude fell 0.1 percent to $73.72 a barrel.
• Gold futures increased 0.6 percent to $1,263.60 an ounce, the highest in two weeks.

--With assistance from Eddie van der Walt.

To contact the reporters on this story: Jeremy Herron in New York at jherron8@bloomberg.net;Sarah Ponczek in New York at sponczek2@bloomberg.net

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

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