U.S. Stocks Rise to Records as Treasuries Slump: Markets Wrap

(Bloomberg) -- U.S. stock benchmarks climbed to all-time highs, while Treasuries tumbled as trade optimism fueled demand for risk assets.

The Dow Jones Industrial Average climbed Monday to claim its first record since July. The S&P 500 and Nasdaq indexes also hit new highs after a report that the U.S. and China are closing in on a partial trade deal and the Federal Reserve cut interest rates last week. The 10-year Treasury yield rose to 1.78% and the dollar advanced versus major peers.

In company news, McDonald’s Corp. fell after firing its chief executive and Under Armour Inc. sank after disclosing an accounting probe -- both declines weighing heavily on consumer shares. Banks and industrial firms led the Stoxx Europe 600 Index toward a four-year high after the U.S. commerce secretary said tariffs on importing vehicles into the American market might be unnecessary. All major Asian markets advanced. A gauge of emerging-market stocks was set for its biggest gain in three weeks.

Investors are trying to push up stocks for a fifth successive week and add to the 18% gain this year already notched by a global gauge of equities. Earnings continue to roll in around the world, with Uber Technologies Inc. and Marriott International Inc. still due Monday. In China, trade data at the end of this week will give details for October against a backdrop of easing tensions on negotiations with U.S. counterparts.

“The earnings season primarily has been so much better than we expected it to be,” JJ Kinahan, chief market strategist at TD Ameritrade, said by phone. “Not that it’s an unbelievable earnings season, but it’s been so much above expectations. The rhetoric on tariffs has been mostly positive and we continue to see positive numbers out of particularly employment, but really in general about the economy.”

Commerce Secretary Wilbur Ross expressed optimism the U.S. would reach a “phase one” trade deal with China this month and said licenses would be coming “very shortly” for American companies to sell components to Huawei Technologies Co. President Donald Trump told reporters Sunday that a trade deal, if completed, will be signed somewhere in the U.S.

Elsewhere, crude-oil futures climbed. The initial public offering process for Saudi Aramco officially started on Sunday, with the stock likely to begin trading in Riyadh next month. Valuations vary widely.

Here are some key events coming up this week:

• Earnings are due from companies including: Uber and Marriott International on Monday; Singapore Airlines on Tuesday; SoftBank and BMW on Wednesday; Walt Disney, Toyota, Deutsche Telekom on Thursday.
• U.S. durable goods data is due Monday along with factory orders.
• Regional Fed presidents including Charles Evans, John Williams and Patrick Harker speak at events on Wednesday.
• Central bank monetary decisions are due Tuesday in Australia and Thursday by the Bank of England.
• 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 rose 0.4% as of 4 p.m. New York time; the Dow Jones Industrial Average climbed 0.4%.
• The Stoxx Europe 600 Index jumped 1% to a four-year high.
• Germany’s DAX Index surged 1.4% to a 17-month high.
• The MSCI Emerging Markets Index rose 1.3% to the highest in more than four months.

Currencies

• The Bloomberg Dollar Spot Index increased 0.3%, the biggest gain in five weeks.
• The euro fell 0.4% to $1.1127.
• The British pound fell 0.5% to $1.2884.
• The Japanese yen weakened 0.4% to 108.62 per dollar.

Bonds

• The yield on 10-year Treasuries rose seven basis points to 1.78%.
• The two-year rate added four basis points to 1.59%.
• Germany’s 10-year yield rose three basis points to -0.35%.
• Britain’s 10-year yield climbed six basis points to 0.725%.

Commodities

• The Bloomberg Commodity Index jumped 0.5% to a seven-week high.
• West Texas Intermediate crude increased 0.6% to $56.52 a barrel.
• Gold weakened 0.4% to $1,508.53 an ounce.

--With assistance from Haidi Lun, Ravil Shirodkar and Adam Haigh.

To contact the reporter on this story: 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

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