Stocks Advance as Mood Remains Buoyant After Data: Markets Wrap
European equities jumped and U.S. index futures were higher as shares advanced across much of Asia, though they fell in China even as producer prices showed robust demand in Asia’s largest economy. Germany’s trade surplus was higher than estimated as May exports beat forecasts. The yen was at a two-month low. Bank of Japan Governor Haruhiko Kuroda reiterated that policy could be adjusted as needed. Oil pared some gains. Gold and silver fell.
With global stocks close to all-time highs, investors are shrugging off political uncertainty and placing their faith in a continued earnings expansion on broadening global growth. U.S. employers added the most jobs in four months in June, though wage increases were sluggish, according to data Friday.
“The weaker wage growth buys the Fed more time to wait for inflation signals to pick up before increasing rates which supports the current market view of balance sheet announcement in September followed by a rate hike in December,” Stephen Innes, a senior trader at Oanda Corp. in New York, wrote in a note Monday. “Ultimately, the Goldilocks NFP is a win-win for the U.S. dollar and global equities.”
The G-20 summit made little headway on dominant foreign policy issues such as North Korea’s escalation of tensions. Meetings between U.S. President Donald Trump and the leaders of South Korea, Japan and China ended without a clear consensus about how to curb North Korea’s nuclear ambitions.
Here’s what investors will be watching:
Federal Reserve Chair Janet Yellen’s testimony before Congress will be in focus later this week as investors look for guidance of when the U.S. central bank could start reducing its balance sheet. Other Fed speakers include Lael Brainard, while there’s plenty of data releases. Retail sales, industrial output and business inventories may sway GDP forecasts and CPI could signal if disinflation is intensifying.
These are the main moves in markets:
Currencies
The yen fell 0.3 percent to 114.23 per dollar as of 4:05 p.m. in Tokyo, its weakest since May 11. The Bloomberg Dollar Spot Index was down less than 0.1 percent. The Canadian dollar fell 0.1 percent after its 0.8 percent jump Friday. The pound rose 0.1 percent and the euro was little changed. The Mexican peso surged 0.9 percent to 17.92 versus the greenback, its strongest level this month. The currency also rose 0.9 percent Friday. The Korean won led gains in Asia, up 0.4 percent to 1,149.40 per dollar.Stocks
The Euro Stoxx 50 index gained 0.4 percent. S&P 500 Index futures were up 0.2 percent. The MSCI Asia Pacific Index rose 0.3 percent after hitting a five-week low Friday. Japan’s Topix Index added 0.5 percent. Australia’s S&P/ASX 200 Index gained 0.4 percent. Hong Kong’s Hang Seng Index rose 0.7 percent, while shares on the mainland declined.
Bonds
The yield on 10-year Treasuries was steady at 2.39 percent after rising 24 basis points in the past two weeks.
Commodities
WTI crude strengthened 0.2 percent to $44.29 a barrel following its 2.8 percent slide Friday. Gold dropped 0.5 percent to $1,205.97 an ounce and silver fell 1.5 percent.
