U.S. Stocks Slip From Records, Treasuries Advance: Markets Wrap

  • S&P 500 halts seven-day rally as banks, energy producers drop
  • Crude, natural gas retreat; Treasury 10-year yield retreats

Citi's Levkovich Sees Positive Surprise Ahead for Markets

U.S. stocks halted a seven-day advance as data showing a rebound in consumer spending offset a wider selloff in commodities. Treasuries advanced amid month-end buying.

The S&P 500 Index edged lower from an all-time high banks paced gains while energy producers slumped amid a retreat in crude. Tech shares lifted the Nasdaq 100 Index to a fresh record. The 10-year Treasury note yield fell to 2.21 percent. The Stoxx Europe 600 Index declined a fourth day as data showed euro-area economic confidence fell for the first time this year.

The pullback across many assets serves as a reminder that, while equity benchmarks across the world have posted repeated records this year, potential headwinds to the global growth story remain and investor concern lingers. Elections in the U.K., Germany and Italy are looming as Brexit negotiations begin, while U.S. President Donald Trump is ratcheting up a dispute with Germany and battling to implement spending and tax-cut plans.

Fed Bank of St. Louis President James Bullard said on Tuesday the new administration will need to fulfill the expectations that have driven the stock market higher, while Fed Governor Lael Brainard said soft inflation could cause her to reassess the path forward for monetary policy should it linger. The Fed meets in two weeks. Data Tuesday showed American consumers on track for a second-quarter comeback after a weak stretch at the start of the year.

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Here are some of the key events coming up:

  • The euro-area’s preliminary headline inflation rate will come on Wednesday.
  • Fed speakers are out and about as the FOMC’s June 13-14 meeting approaches. Robert Kaplan will be in New York Wednesday.
  • The U.S. jobs report Friday may bolster the case for a rate hike, with a gain of 185,000 positions expected.
  • Brazil’s central-bank decision on Wednesday will probably see a cut of 75 to 100 basis points from the current 11.25 percent, according to economists.
  • China’s May manufacturing PMIs on Wednesday might indicate that the nation’s 2017 growth has already peaked.
  • The EIA is due to release its monthly supply reports Wednesday.

Here are the main movers in markets:

Stocks

  • The S&P 500 slipped 0.1 percent to 2,412.93 at 4 p.m. in New York. The index retreated for the first time in eight days after the longest rally since February.
  • The Nasdaq 100 Index advanced for an eighth day to an all-time high. Amazon.com Inc. briefly topped $1,000 a share for the first time before trading little changed.
  • The Stoxx Europe 600 Index declined 0.2 percent and emerging-market shares slipped 0.4 percent.

Currencies

  • The Bloomberg Dollar Spot Index was little changed after initially rising data. It’s near the lowest level since November.
  • The euro rose 0.2 percent to $1.1189. The shared currency swung between gains and losses as traders weighed Germany’s inflation miss against a Reuters report that the ECB will likely discuss removing its easing bias in June. It recovered early losses sparked by speculation Greece could forego its next bailout payment.
  • The yen strengthened 0.5 percent to 110.767 per dollar.

Commodities

  • Gold futures fell for the first time in three days, losing 0.4 percent to settle at $1,265.70 an ounce.
  • West Texas oil fell 14 cents to settle at $49.66 per barrel. OPEC and Russia’s deal last week to extend output limits through March was met with a sell-off as it didn’t include deeper cuts, a plan for the rest of 2018 or a new ally.

Bonds

  • The yield on 10-year Treasuries declined three basis points to 2.21 percent.
  • Similar maturity German bunds rose a fifth day, sending the yield lower to 0.292 percent.

— With assistance by Garfield Clinton Reynolds, Edward Bolingbroke, and Samuel Potter

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