Stock Traders Buy the Dip at End of Jittery Week: Markets Wrap

(Bloomberg) -- Stocks climbed as dip buyers resurfaced at the end of a week marked by a surge in global volatility.

All major groups in the S&P 500 advanced, while the NYSE FANG+ Index of giants such as Apple Inc. and Facebook Inc. halted a five-day slide. Chinese shares listed in the U.S. rallied Friday, but still suffered their longest streak of weekly losses in a decade. Both the dollar and Treasuries were little changed.

Financial markets were rattled this week by speculation the global recovery could lose momentum just as central banks get ready to reduce support measures. Dallas Federal Reserve President Robert Kaplan said he’s open to adjusting his view that the Fed should start tapering its asset-purchase program sooner rather than later if the delta variant persists and hurts economic progress.

While risks to the economy are mounting, money managers in search of returns are sticking to equities. U.S. stock-fund data collected before the Fed signaled it could potentially start tapering this year showed investors have confidence in policy support to buy the dip, according to Bank of America Corp. strategists.

“While investors have understandably been worrying about the Federal Reserve’s potential tapering plans, against the backdrop of persistent Covid-19 cases, we believe the Fed is unlikely to announce tapering plans until case counts fall back to early-summer levels,” said Rod von Lipsey, managing director at UBS Private Wealth Management.

Traders are eagerly awaiting the Aug. 26-28 Jackson Hole symposium, which may offer clues on the central bank’s timeline for tapering stimulus. The topic of this year’s event is “Macroeconomic Policy in an Uneven Economy.” 

Some corporate highlights:

• Cryptocurrency-exposed companies Coinbase Global Inc. and Riot Blockchain Inc. joined a rally in Bitcoin.
• Deere & Co., the largest maker of agricultural machinery, dropped amid concerns that rising costs and supply-chain snags will intensify going into next year.

For more market analysis read our MLIV blog.

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.8% as of 4 p.m. New York time
• The Nasdaq 100 rose 1.1%
• The Dow Jones Industrial Average rose 0.6%
• The MSCI World index rose 0.4%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro rose 0.2% to $1.1701
• The British pound fell 0.1% to $1.3625
• The Japanese yen was little changed at 109.78 per dollar

Bonds

• The yield on 10-year Treasuries was little changed at 1.25%
• Germany’s 10-year yield was little changed at -0.49%
• Britain’s 10-year yield declined two basis points to 0.52%

Commodities

• West Texas Intermediate crude fell 2.2% to $62.32 a barrel
• Gold futures were little changed

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