Stocks Drift Into Close as Trade Picture Clouds: Markets Wrap

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07 Nov 2019, 01:58 PM IST

Stocks Drift Into Close as Trade Picture Clouds: Markets Wrap

New York Stock Exchange (NYSE) signage is displayed at the NYSE in New York, U.S.(Photographer: Michael Nagle/Bloomberg)

(Bloomberg) --

U.S. stocks drifted after reports that any signing of a partial trade deal with China won’t happen until at least December, deflating early-session gains. Treasuries rebounded after dropping for three days.

The S&P 500 Index eked out a narrow advance Wednesday while the Nasdaq Composite retreated on word that the signing of a preliminary trade agreement could be delayed as the parties wrangle over a venue. Tech stocks slid and shares in energy companies declined alongside West Texas crude after the EIA reported a big buildup in inventories. Health care and financials rallied.

“It seems like markets are really treading water here, trying to decide where to go based on what’s happening with trade later on this year and what’s going on with earnings,” said Chris Zaccarelli, chief investment officer of Independent Advisor Alliance LLC.

The Stoxx Europe 600 Index fluctuated before closing higher as data suggesting that the euro-area economy may be gathering momentum was offset by the International Monetary Fund’s warning of clouds on the horizon. Banks advanced after Societe Generale SA strengthened its key capital ratio, while global cleaning giant ISS A/S slumped after cutting its full-year outlook.

A wave of interest-rate cuts by central banks and mounting hopes of a U.S.-China trade deal have buoyed confidence in markets just as key economic indicators show signs of stabilization. While the latest data from Europe suggest a robust recovery may not be on the cards, the relative improvement eased fears that the global economy was hurtling toward a recession, prompting traders to temper bets for further monetary easing.

In Asia, benchmarks rose in Japan and Mumbai, but fell in Shanghai and Sydney. The yuan strengthened past 7 per dollar for a second day, while the greenback held steady as investors awaited fresh developments on the U.S.-China trade front. Bloomberg’s gauge of raw-material spot prices climbed to its highest level since April.

Elsewhere, gold, which slumped Tuesday, scored small gains. Emerging-market stocks slipped for the first time in five days.

Here are some key events coming up this week:

Earnings are due this week from companies including: Walt Disney and Deutsche Telekom.
A Bank of England monetary decision is due Thursday.
The USDA World Agricultural Supply and Demand Estimates Report for November comes out Friday.

These are the main moves in markets:

Stocks

The S&P 500 Index increased 0.1% to 3,076.76 as of 4:02 p.m. New York time.

The Nasdaq Composite Index declined 0.3% to 8,410.63, the biggest fall in a week.

The Stoxx Europe 600 Index gained 0.2% to 405.07, the highest in more than four years.

The MSCI Emerging Market Index declined 0.3% to 1,067.63, the first retreat in a week and the biggest drop in more than two weeks.

Currencies

The Bloomberg Dollar Spot Index was little changed at 1,200.90, the highest in almost three weeks.

The euro declined 0.1% to $1.1068, the weakest in three weeks.

The British pound decreased 0.2% to $1.2857, the weakest in more than a week.

The Japanese yen strengthened 0.2% to 108.95 per dollar.

Bonds

The yield on 10-year Treasuries decreased four basis points to 1.82%.

The yield on two-year Treasuries dipped two basis points to 1.61%.

Britain’s 10-year yield declined six basis points to 0.715%, the largest decrease in more than three weeks.

Germany’s 10-year yield declined two basis points to -0.33%.

Commodities

West Texas Intermediate crude fell 1.2% to $56.53 a barrel.

Gold strengthened 0.5% to $1,490.81 an ounce.

--With assistance from Joanna Ossinger, Cormac Mullen, Adam Haigh and Robert Brand.

To contact the reporters on this story: Claire Ballentine in New York at cballentine@bloomberg.net;Sarah Ponczek in New York at sponczek2@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Andrew Dunn