U.S. Stocks Gain as Senate Votes to End Shutdown: Markets WrapBy
Treasuries erase advance; West Texas Intermediate crude gains
Dollar declines as euro, pound rise; gold edges higher
U.S. equity gauges closed at records as the government shutdown appeared to be on the brink of ending and investors turned their attention toward earnings. The dollar fell and Treasuries traded little changed.
The S&P 500 Index rose to an all-time high after the U.S. Senate broke a stalemate over a short-term spending bill, setting the stage for the government to reopen. Investors are awaiting about 80 earnings reports this week from companies in the benchmark index. The dollar traded near lows for the year and 10-year Treasury yields held close to 2.66 percent.
“GDP impacts from prior shutdowns were minimal. It makes sense for equity investors to brush aside the political shenanigans and focus instead on company fundamentals,” Alexandra Coupe, associate director at PAAMCO in Irvine, California, said. “Similar to the last government shutdown in 2013, equity markets have hit new highs in the wake of the resolution.”
Equity investors had appeared mostly undecided over the latest U.S. government drama, weighing it against the optimism over economic growth and profit increases that pushed many stock indexes to all-time highs. Meanwhile, the next catalyst for bonds may come from commentary by policy makers after European and Japanese central bank decisions this week. Their signals that unprecedented stimulus will soon be wound back has sparked a surge in yields this month.
Elsewhere, West Texas oil rose after OPEC and Russia said output cuts will continue until the end of the year. The MSCI Emerging Market Index of stocks gained for a seventh day, poised for the longest winning streak in six months as the likes of Goldman Sachs Group and Blackstone Group joined the chorus of developing-nation bulls. South Africa’s rand touched its highest since 2015 on speculation President Jacob Zuma may be forced to leave office.
Terminal users can read more in our markets blog.
Here’s what to watch out for this week:
- Earnings season is in full swing: Netflix and Halliburton are due to post results Monday, with Novartis, General Electric, Intel, LVMH Moet Hennessy Louis Vuitton, Starbucks, Hyundai Motor and Fanuc Corp. coming later in the week.
- Barring any last minute changes in Washington, President Donald Trump will join world leaders and senior executives in Davos, Switzerland, for the annual World Economic Forum.
- Central banks: Bank of Japan monetary policy decision and briefing on Tuesday; European Central Bank rate decision on Jan. 25
- U.K. Prime Minister Theresa May’s Brexit bill is set to be taken up in the House of Lords.
And these are the main moves in markets:
- The S&P 500 Index rose 0.8 percent to 2,832.97 as of 4 p.m. New York time, a record.
- The Dow Jones Industrial Average gained 142 points to 26,214.67, an all-time high.
- The Stoxx Europe 600 Index advanced 0.3 percent to the highest in more than two years.
- The MSCI World Index of developed countries rose 0.4 percent to the highest on record.
- The MSCI Emerging Market Index advanced 0.5 percent, its seventh consecutive advance.
- The U.K.’s FTSE 100 Index fell 0.2 percent.
- The euro increased 0.3 percent to $1.2258.
- The Bloomberg Dollar Spot Index fell 0.2 percent.
- The British pound gained 0.9 percent to $1.3984, the strongest in 19 months.
- The Japanese yen fell 0.2 percent at 110.99 per dollar.
- The yield on 10-year Treasuries was steady at 2.66 percent.
- Germany’s 10-year yield was little changed at 0.57 percent.
- Britain’s 10-year yield rose two basis points to 1.358 percent.
- Gold gained 0.2 percent at $1,334 an ounce.
- West Texas Intermediate crude rose 0.2 percent to $63.49 a barrel.
— With assistance by Todd White, and Elena Popina