U.S. Stocks Rise for Second Day While Pound Drops: Markets Wrap

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U.S. stocks capped a second day of gains, while Treasuries rallied after weak inflation data bolstered bets the Federal Reserve can stay patient. The pound fell as the U.K.’s Brexit turmoil deepened.

While the S&P 500 Index pushed its two-day gain to 1.8 percent, Brexit and renewed turmoil for Boeing dominated headlines throughout the day. The planemaker sank as a slew of countries grounded its troubled 737 Max jets. Sterling fell after U.K. lawmakers rejected the government’s latest deal to leave the European Union, with uncertain implications for the country’s political future. The 10-year Treasury yield slumped with the dollar. Crude rose.

“I expect equity markets to remain volatile and to tread water, and there is still too much risk in risk assets, and ultimately I think bond yields will head lower but this is a process that unfolds, it’s not a sudden event,” Suzanne Hutchins, a senior portfolio manager at Newton Investment Management in London, said in an interview at Bloomberg’s New York headquarters.

The pound whipsawed amid the Brexit drama, rising overnight after Theresa May won a new deal to leave the EU. It tumbled as much as 1.1 percent versus the dollar as the deal’s fate looked uncertain, only to pare the drop amid parliamentary debate. The vote to reject the pact sent it lower again.

Alongside Brexit developments, investors have a slew of economic data to digest this week. The latest inflation reading came amid falling prices for autos and prescription drugs, adding to evidence the American economy is in no danger of overheating. In the coming days the focus will turn to Chinese production and retail sales, as well as a Bank of Japan policy decision.

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 increased 0.3 percent as of 4 p.m. New York time.
• The Dow Jones Industrial Average fell 0.3 percent. Boeing is its largest component.
• The Nasdaq 100 rose 0.5 percent.
• The Stoxx Europe 600 Index rose less than 0.1 percent.
• The U.K.’s FTSE 100 Index gained 0.2 percent.
• The MSCI Asia Pacific Index advanced 1.2 percent, the biggest gain in almost six weeks.
• The MSCI Emerging Market Index climbed 1 percent.

Currencies

• The Bloomberg Dollar Spot Index declined 0.1 percent.
• The euro advanced 0.3 percent to $1.1275.
• The British pound decreased 0.4 percent to $1.3095.
• The Japanese yen increased less than 0.05 percent to 111.20 per dollar.

Bonds

• The yield on 10-year Treasuries fell four basis points to 2.5979 percent.
• Germany’s 10-year yield increased less than one basis point to 0.07 percent.
• Britain’s 10-year yield advanced one basis point to 1.189 percent.

Commodities

• Gold increased 0.4 percent to $1,297.98 an ounce.
• West Texas Intermediate crude gained 1 percent to $57.37 a barrel, the highest in more than two weeks.

--With assistance from Chikako Mogi, Katherine Greifeld, Andreea Papuc and Todd White.

To contact the reporters on this story: Jeremy Herron in New York at jherron8@bloomberg.net;Reade Pickert in New York at epickert@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net;Samuel Potter at spotter33@bloomberg.net

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