U.S. Stocks, Dollar Mixed Amid Policy Whirlwind: Markets Wrap

  • Trump moves to improve executive record before 100th day mark
  • Amazon, Alphabet rise in late trading, Intel slips on results

Kuroda Says BOJ Will Maintain Rates Depending on Economy

U.S. stocks and the dollar were little changed after an up-and-down session amid a whirlwind of policy news as the Trump administration seeks to burnish its record ahead of its 100th day in office.

The S&P 500 Index eked out a gain to close near all-time highs amid a flurry of headlines on everything from Nafta to tax reform, the budget and health care. Energy producers tumbled after crude slid to $49 a barrel on concern over a supply glut, while earnings lifted technology indexes to fresh records. Amazon.com Inc. and Alphabet Inc. climbed after hours as results topped estimates, while Intel Corp. slipped.

The Mexican peso pared gains and Canada’s dollar was little changed amid mixed signals from the White House on the Nafta regional trade agreement. The euro weakened after the European Central Bank signaled its commitment to stimulus even as the region’s economy firms. Gold was little changed and emerging-market assets slipped.

Politics remained in focus this week as the Trump administration unveiled a hastily assembled plan to cut taxes on Wednesday and gave mixed signals on its intentions for the North American trade agreement. The machinations left markets unsure of the policy direction, with lots of discussion and few concrete actions on which to trade. Congress is also considering a continuing resolution to avoid a government shutdown, while House Republicans attempt to revive legislation to repeal Obamacare.

The U.S. political turmoil overshadowed the ECB’s latest policy commentary. President Mario Draghi showed growing enthusiasm about the state of the euro-area economy, while cautioning that inflation pressures remain too weak to contemplate paring back stimulus.

Read our Markets Live blog here.

Here are some key upcoming events investors are watching:

  • U.S. GDP is due Friday. It’s projected to show the economy expanded at a 1 percent annualized rate in the first quarter, the weakest pace in a year.
  • Earnings will contribute to trading on U.S. markets Friday, with a flood of postmarket releases setting the tone.

Here are the main moves in markets:

Stocks

  • The S&P 500 rose 0.1 percent to 2,388.86 at 4 p.m. in New York.
  • The Nasdaq 100 Index jumped 0.5 percent to a record, while the Nasdaq Composite ended at an all-time high.
  • In late trading, Alphabet rose 3.7 percent and Amazon added 3.6 percent as of 4:28 p.m. Intel lost 3.6 percent.
  • PayPal jumped and Under Armour Inc. surged amid earnings announcements. Energy shares lost 1.1 percent.
  • The Stoxx Europe 600 Index slipped 0.2 percent after climbing for six straight sessions to the highest level since August 2015. 
  • Deutsche Bank dropped 3.7 percent after debt and equity trading missed estimated in the first quarter.
  • Tokyo stocks fell for the first time in six days and the yen slipped. The Bank of Japan kept its policies unchanged while lowering its inflation forecast, underscoring that any exit from its monetary easing remains far away.

Currencies

  • The Bloomberg Dollar Spot Index added less than 0.1 percent, after increasing 0.3 percent on Wednesday.
  • The euro saw choppy trading during the ECB press conference, rising to 1.0933 from its interim low as Draghi’s more upbeat tone appeared to align with trader expectations that had built over the course of the week. It traded lower by 0.3 percent to $1.0874.
  • The Mexican peso rose 0.7 percent, paring a gain of 1.4 percent as the White House continued to give mixed signals on Nafta. The peso slid 1.7 percent on Wednesday. 
  • The Canadian dollar was little changed, erasing earlier gains.

Bonds

  • Treasuries advanced, with the yield curve steepening, as a risk-off sentiment took hold across markets after posturing by lawmakers in Washington.
  • The 10-year Treasury yield slipped to 2.29 percent. The rate fell three basis points to 2.30 percent on Wednesday, after climbing for five straight sessions.
  • German benchmark yields slid five basis points to 0.296 percent after the ECB’s signal that inflation remains tepid.
  • Swedish government bonds rallied after the central bank unexpectedly extended its bond-buying program, prompting investors to bet that policy makers will delay a rate increase.

Commodities

  • Oil dropped to a one-month low as Libya reopened its biggest field and U.S. crude production climbed a 10th week. Futures slid 1.3 percent to settle at $48.97 a barrel in New York.
  • Gold futures advanced 0.1 percent to $1,265.50 an ounce in New York. Contracts remain below the pre-election level of $1,305.06 an ounce. Prices cratered more than 13 percent through Dec. 22. They ground back to $1,289.76 this month after Trump’s airstrikes on Syria and Afghanistan.
  • Iron ore’s sell-off may be set to worsen. The world’s largest mining company says that global supplies are poised to increase in the coming years as low-cost producers add more tons to the market, delivering its warning just hours after a similar red flag from the World Bank.
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