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Stocks Mixed Before Next Week's Fed Rate Report: Markets Wrap

Updated on
  • Dollar climbs, gold sinks on Kudlow remarks; yen gains again
  • Investors weigh mixed outlook on trade, Fed policy trajectory
'Good Side' of U.S. Eco Data Is Strong, Says BofA's Meyer

U.S. stocks ended mixed Thursday, as industrial and tech gains were offset by losses in the consumer and energy sector. Ten-year Treasury yields steadied after briefly sinking below 2.80 percent as traders look forward to next week’s Federal Reserve policy decision.

With volume running about 17 percent below average, the S&P 500 Index notched its longest losing streak of 2018 -- four days. The Empire Manufacturing Index exceeded projections and initial jobless claims came in just below estimates, signaling continuing strength in the U.S. economy. While an increase in borrowing costs at the Fed meeting is seen as a done deal, it remains an open question whether U.S. policy makers will lift their expectations for the pace of future increases.

“The factory orders number in conjunction with the possibility of another round of tax cuts would bolster the somewhat weakening growth story we’ve seen the past two weeks,” Kevin Caron, a senior portfolio manager at Washington Crossing Advisors, said by phone.

Pipeline stocks plunged after the Federal Energy Regulatory Commission ruled that master-limited partnerships can no longer recover a key income-tax allowance.

Investors are weighing prospects for more U.S. trade protectionism after new White House appointee Larry Kudlow signaled support for a strong dollar and took a tough line on China. Gold declined after Kudlow said he’d sell the metal and buy the greenback, which gained.

The Stoxx Europe 600 Index advanced, with big gains in insurance and financial shares. Norway’s krone rose to the strongest level since early February after its central bank signaled faster interest-rate increases. The yen gained for a third day this week.

Elsewhere, West Texas crude advanced above $61 a barrel as signs of stronger U.S. fuel consumption balanced OPEC’s forecasting for the first time that new supplies from its rivals will exceed demand growth this year.

BofA’s Michelle Meyer says recent data shows "continued strength" in the U.S. economy.

(Source: Bloomberg)

Terminal users can read more in our markets blog.

Here are some of the key things happening this week:

  • Japan industrial production is out on Friday.
  • EU27 government officials discuss the European Union’s Brexit position.

And these are the main moves in markets:


Stocks

  • The S&P 500 Index fell 0.1 percent as of 4 p.m. New York time.
  • The Nasdaq 100 Index declined 0.1 percent.
  • The Stoxx Europe 600 Index climbed 0.5 percent.
  • The U.K.’s FTSE 100 Index gained 0.1 percent.
  • Germany’s DAX Index increased 0.9 percent.
  • The MSCI Emerging Markets Index decreased 0.3 percent.

Currencies

  • The Bloomberg Dollar Spot Index advanced 0.5 percent, the biggest rise in over two weeks.
  • The euro fell 0.5 percent to $1.2301.
  • The British pound fell 0.2 percent to $1.3938.
  • The Japanese yen rose less than 0.05 percent.

Bonds

  • The yield on 10-year Treasuries rose one basis point to 2.82 percent.
  • Germany’s 10-year yield decreased two basis points to 0.58 percent, the lowest in seven weeks.
  • Britain’s 10-year yield gained less than one basis point to 1.438 percent.

Commodities

  • West Texas Intermediate crude climbed 0.4 percent to $61.21 a barrel.
  • Gold fell 0.7 percent to $1,316.20 an ounce, the biggest fall in a week.
  • LME copper fell 1 percent to $6,920.00 per metric ton.

— With assistance by Adam Haigh, Tim Loh, Stephen Cunningham, and Eddie van der Walt

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