U.S. Stocks Close in on Records, Treasuries Rise: Markets Wrap

  • Dow average nears 22,000 level ahead of Apple earnings
  • Greenback holds small advance as spending data meets estimates

Market's Climbing Bubble Mountain, Says Grisanti

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U.S. stocks flirted with all-time highs amid the latest batch of corporate results. Treasuries climbed with the dollar as data gave mixed signals on the strength of American economic growth.

The Dow Jones Industrial Average closed at a record and moved within reach of 22,000, while the S&P 500 Index retreated from a historic high. The Bloomberg dollar index edged up after posting a fifth straight monthly loss in July, as a reading on manufacturing last month fell short of expectations and data showed spending by U.S. consumers barely grew in June. The yield on 10-year Treasury notes slipped to 2.25 percent. Crude fell back after topping $50 a barrel.

As economic data largely supports the global growth story and company earnings in many cases beat estimates, investors will be forgiven for diving further into a bull market that’s propelled equity markets the world over to unprecedented levels. But with valuations well above average, monetary policy poised to turn hawkish and a U.S. administration mired in controversy there remains a degree of caution in markets.

Figures from gross domestic product and economic confidence to joblessness and manufacturing output signaled the euro-area economy was gaining steam, but it wasn’t enough to reverse a drop in the euro and most benchmark government bonds rose.

Terminal users can read more in our Markets Live blog.

Meanwhile, the Reserve Bank of Australia held the benchmark at 1.5 percent while warning that a rising currency is expected to subdue inflation and weigh on the outlook for growth and employment. The Aussie fluctuated, dipping below 80 U.S. cents and jumping as high as 80.43 cents.

Here are some key upcoming events:

  • Apple earnings hit after the U.S. close. Analysts expect a somewhat cautious outlook due to potential delays in the new iPhone introduction.
  • Brazil’s Congress votes on Wednesday on whether to put President Michel Temer on trial.
  • Bank of England Governor Mark Carney may signal a more hawkish tone at its quarterly Inflation Report on Thursday. The central bank will likely keep rates on hold.
  • U.S. jobs data will probably show employers added about 180,000 workers in July. That’s Friday.
  • Rate decisions are due in India (Wednesday), Czech Republic and Ukraine (Thursday), and Romania (Friday).

And here are some of the key moves in markets:

Stocks

  • The S&P 500 Index rose 0.2 percent, falling just short of the all-time high it reached last week.
  • The Dow added 73 points to 21,963.92, a new record, and closed in on its round-number milestone.
  • The MSCI All-Country World Index climbed 0.4 percent to the highest on record.
  • The Stoxx Europe 600 Index increased 0.6 percent.
  • The MSCI Emerging Market Index gained 0.2 percent.

Currencies

  • The Bloomberg Dollar Spot Index rose 0.2 percent.
  • The euro decreased 0.3 percent to $1.1802.
  • The British pound declined 0.1 percent to $1.3203.

Bonds

  • The yield on 10-year Treasuries fell four basis points to 2.25 percent.
  • Germany’s 10-year yield dropped five basis points to 0.49 percent, the lowest in a month.
  • Britain’s 10-year yield slipped two basis points to 1.21 percent.

Commodities

  • West Texas Intermediate crude fell 1.9 percent to $49.21 a barrel, the first retreat in more than a week.
  • Gold was essentially unchanged at $1,269.53 an ounce.

Asia

  • The MSCI Asia-Pacific Index rose to the highest since 2007 as equity indexes from Tokyo to Sydney advanced. Japan’s Topix index added 0.6 percent. Banks rallied after Sumitomo Mitsui Financial Group Inc. reported a 31 percent increase in net income for the June quarter. 
  • Australia’s S&P/ASX 200 Index closed 0.9 percent higher, while South Korea’s Kospi index ended up 0.8 percent.
  • The Hang Seng Index in Hong Kong rose 0.8 percent, while the Shanghai Composite Index climbed 0.6 percent.
  • The yen fell 0.2 percent to 110.49 per dollar, having climbed 1.9 percent in July.
  • The Aussie dollar slipped 0.3 percent to 79.77 cents.

— With assistance by Adam Haigh

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