Stocks rose, while Treasury yields fell as another batch of economic data cemented bets the Federal Reserve is approaching the end of its interest-rate hikes.
(Bloomberg) — Stocks rose, while Treasury yields fell as another batch of economic data cemented bets the Federal Reserve is approaching the end of its interest-rate hikes.
The S&P 500 topped 4,500. Visa Inc. and Mastercard Inc. climbed on plans to boost the fees that many retailers pay when accepting customers’ credit and debit cards. Texas Instruments Inc. slid after an analyst downgrade while HP Inc. sank on a bearish outlook. Salesforce Inc. will report earnings after the close, and investors will be looking for signs on whether new artificial-intelligence products can help boost revenue growth.
Two-year yields dropped four basis points to 4.85%. The dollar retreated against all of its developed-market peers. Swap contracts tied to Fed meeting dates priced in less than a 50% chance of another quarter-point rate increase this year. As recently as Tuesday — before the release of weaker-than-expected gauges of job openings and consumer confidence — a rate hike was given a probability of about 75%.
US gross domestic product rose at a revised 2.1% annualized pace in the second quarter — below the government’s previous estimate — amid a more moderate business investment. American companies added the fewest jobs in five months, according to figures published by the ADP Research Institute in collaboration with Stanford Digital Economy Lab. Pending-home sales unexpectedly rose.
“The reality of the current state of the economy is likely in the middle,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors. “To the extent that investors view any signs that the economy is moving into a ‘not too hot, not too cold’ phase that could bring an end to Fed tightening, it could be viewed as a positive, at least briefly.”
The euro rose as inflation slowed less than expected in Germany and quickened in Spain, offering European Central Bank officials a partial picture of the region’s price pressures as they judge whether to raise interest rates again.
Key events this week:
- China manufacturing PMI, non-manufacturing PMI, Thursday
- Japan industrial production, retail sales, Thursday
- Eurozone CPI, unemployment, Thursday
- ECB publishes account of July monetary policy meeting, Thursday
- US personal spending and income, initial jobless claims, Thursday
- China Caixin manufacturing PMI, Friday
- Eurozone S&P Global Eurozone Manufacturing PMI, Friday
- South African central bank governor Lesetja Kganyago, Atlanta Fed President Raphael Bostic, BOE’s Huw Pill, IMF’s Gita Gopinath on panel at the South African Reserve Bank conference, Friday
- Boston Fed President Susan Collins speaks at virtual event, Friday
- US unemployment, nonfarm payrolls, light vehicle sales, ISM manufacturing, construction spending, Friday
Some of the main moves in markets:
Stocks
- The S&P 500 rose 0.3% as of 11:30 a.m. New York time
- The Nasdaq 100 rose 0.3%
- The Dow Jones Industrial Average rose 0.1%
- The Stoxx Europe 600 fell 0.1%
- The MSCI World index rose 0.4%
Currencies
- The Bloomberg Dollar Spot Index fell 0.2%
- The euro rose 0.5% to $1.0932
- The British pound rose 0.7% to $1.2728
- The Japanese yen was little changed at 145.82 per dollar
Cryptocurrencies
- Bitcoin fell 1.4% to $27,203
- Ether fell 1.3% to $1,704.34
Bonds
- The yield on 10-year Treasuries declined two basis points to 4.10%
- Germany’s 10-year yield advanced three basis points to 2.54%
- Britain’s 10-year yield was little changed at 4.42%
Commodities
- West Texas Intermediate crude fell 0.2% to $81.03 a barrel
- Gold futures rose 0.4% to $1,973 an ounce
This story was produced with the assistance of Bloomberg Automation.
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