U.S. Stocks Rise to Four-Month High as Pound Jumps: Markets Wrap

(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.

U.S. equities gained as data signaled a resilient economy and modest pressure on inflation. The pound jumped as the U.K. parliament voted to reject a no-deal Brexit.

The S&P 500 Index climbed for a third day, wiping out last week’s losses and reaching a four-month high as it held above the key 2,800 level. Oil prices rallied to the highest this year. Treasury yields edged up as orders for business equipment increased in January by the most in six months as the producer price index rose less than forecast in February.

The U.S. data signaled a positive start to the year for the world’s biggest economy and little pressure on the Federal Reserve to raise interest rates, just as investors were digesting disappointing numbers from Japan and Australia. The ongoing Brexit drama, a cut to the U.K.’s growth forecast and a warning from America’s top trade negotiator that tariffs may not be rolled back are adding to the complex picture, with reports on Chinese production and retail sales and a Bank of Japan policy decision also coming up this week.

“It’s pretty remarkable the strength of the market over the last couple of days,” said Emily Roland, the head of capital markets research at John Hancock Investments. The producer-price data “is further evidence that the Fed’s more patient approach should provide support for risk assets, at least for now.’’

Sterling extended its gains as U.K. lawmakers rejected the idea of tearing the country out of the European Union with no agreement and U.K. Prime Minister Theresa May was said to plan to ask for an extension to the March 29 Brexit deadline lasting about two months.

Elsewhere, European equities gained and Asian stocks slumped. West Texas oil was boosted by a decline in U.S. crude and fuel stockpiles added to evidence of a tightening market. Emerging-market stocks declined for the first time in three days.

Here are some of the key events coming up:

• Chinese retail sales and industrial production data are scheduled for release this week. The National People’s Congress is set to wrap up on Friday.
• Bank of Japan Governor Haruhiko Kuroda will speak on Friday, after he and his board meet to decide on monetary policy.

And these are the main moves in markets:

Stocks

• The S&P 500 Index rose 0.7 percent as of the close of trade in New York.
• The Stoxx Europe 600 Index gained 0.5 percent.
• The MSCI All-Country World Index rose 0.6 percent.
• The MSCI Emerging Market Index dipped less than 0.1 percent.
• The Nikkei-225 Stock Average fell 1 percent.

Currencies

• The Bloomberg Dollar Spot Index dipped 0.3 percent.
• The euro increased 0.4 percent to $1.1337, the strongest in a week.
• The British pound jumped 1.4 percent, the most in four months, to $1.3255.
• The Japanese yen gained 0.2 percent to 111.1 per dollar.

Bonds

• The yield on 10-year Treasuries climbed one basis point to 2.61 percent.
• Germany’s 10-year yield increased one basis point to 0.06 percent.
• Britain’s 10-year yield rose three basis points to 1.2 percent.

Commodities

• West Texas Intermediate crude increased 2.7 percent to $58.41 a barrel, the highest in four months.
• Gold climbed 0.7 percent to $1,311.06 an ounce, the highest in almost two weeks.
• The Bloomberg Commodity Index rose 0.8 percent.

--With assistance from Adam Haigh, David Wilson, Robert Brand and Sarah Ponczek.

To contact the reporter on this story: Reade Pickert in New York at epickert@bloomberg.net

To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, Brendan Walsh

©2019 Bloomberg L.P.