Dollar, Stocks Fluctuate Before Jobs: Markets Wrap

  • Fed, BOE do little to alter views on reflation trades
  • Attention turns to jobs report as president talks tough

Bill Gross Says Strong Dollar Is a Threat to Growth

Stocks, bonds and the dollar ended little changed as investors turned attention to Friday’s jobs report following a week of central-bank decisions and unconventional moves by the Trump administration that did little to alter views on the state of the world economy.

The S&P 500 Index zigzagged to a gain of less than two points for a second straight day amid corporate results and deal news. The dollar was little changed after slumping to its lowest level since November. The yield on the 10-year Treasury note held below 2.50 percent for a fifth session after briefly rising above that level Wednesday. The pound fell after the Bank of England said there’s more slack in the economy than previously thought. Oil slipped after approaching a one-month high.

With central banks from Japan to England and the U.S. signaling they’re in no rush to change policy direction as the world assesses the impact of American’s new leadership on global growth, investors continue to look for clues on economic strength. While signs point to increasing confidence that growth will accelerate, data have painted a murkier picture, increasing the significance of Friday’s jobs report as the White House leaves investors waiting for details on tax and spending initiatives.

Read our Markets Live blog here.

What’s coming up in the markets:

  • Economists expect a 175,000 increase in U.S. nonfarm payrolls for January, in line with the recent trend, when the Labor Department releases jobs data on Friday. With both hiring and unemployment likely to remain relatively stable, the focus on the jobs report will center on wage pressures.

Here are the main market moves on Thursday:

Stocks

  • The S&P 500 Index rose 1.3 points to 2,280.85 at 4 p.m. in New York. The index has gained or retreated by less than 0.1 percent for five of the past six days, and is down 0.6 percent on the week.
  • Facebook fell 1.8 percent after reporting results. Mead Johnson surged 21 percent after Reckitt Benckiser Group Plc emerged as a surprise suitor for perennial bid candidate.
  • The Stoxx Europe 600 Index dropped 0.3 percent as investors assessed disappointing corporate outlooks with health-care shares falling the most.
  • Deutsche Bank tumbled 5.2 percent after its quarterly trading revenue missed analysts’ estimates.
  • Earnings are coming thick and fast, with mixed results clouding the picture on the state of the global economy.

Currencies

  • The Bloomberg Dollar Spot Index lost 0.2 percent, paring a slide by half after its decline this year reached 3 percent.
  • The euro strengthened 0.1 percent to $1.0764, while the yen traded at 112.74 per dollar.
  • The pound weakened 1 percent. Sterling initially jumped as policy makers signaled increased concern about inflation, before dropping as the forecasts for price growth weren’t as aggressive as some analysts expected.

Commodities

  • Oil slipped after reaching a one-month high amid signs OPEC will have to make further cuts to fully comply with a production deal. West Texas Intermediate slipped 0.2 percent to $53.70 a barrel after earlier topping $54.
  • The oil industry’s struggle through the worst slump in a generation showed signs of easing, with Royal Dutch Shell Plc managing to reduce its record debt for the first time since the downturn began.
  • Gold futures for April delivery advanced 0.9 percent to $1,219.40 an ounce in New York, after touching $1,227.50, the highest for a most-active contract since Nov. 17.
  • Sugar’s rally and higher grain costs helped boost global food prices to the highest in two years last month.

Bonds

  • Treasuries were little changed, with the 10-year yield at 2.47 percent.
  • Apple Inc. is making its first trip to the bond market in six months, becoming the second cash-rich technology company to sell debt this week despite prospects of a U.S. repatriation-tax holiday.
  • Gilts advanced, pushing the yield on the 10-year security down seven basis points to 1.38 percent, after BOE President Mark Carney warned that surprises could still be ahead as the U.K. starts the Brexit process.
  • Spanish and French bonds advanced after auctions were met with ample demand. German bunds gained, with the yield on the benchmark note due in a decade dropping four basis points to 0.43 percent.
(Corrects direction of S&P move, scope on recent moves, in first bullet point of Stocks section.)
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