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Author: Don Obrien

Stocks Drift; Dollar Rises the Most Since June: Markets Wrap


(Bloomberg) — U.S. stocks drifted as traders weighed disappointing earnings and bond-market gyrations sparked by concerns over inflation and monetary tightening.

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The S&P 500 swung between gains and losses after opening lower in wake of underwhelming results from Amazon.com Inc. and Apple Inc. The benchmark index is on pace for its biggest monthly increase since last November. Meanwhile, the Nasdaq 100 pushed higher, offset by gains in Tesla Inc. and Meta Platforms Inc. after its name change from Facebook Inc.

“Front and center are the results from Apple and Amazon yesterday missing expectations, but more importantly the commentary about the supply chains,” said Cliff Hodge, chief investment officer at Cornerstone Wealth Group.

Yields on shorter-maturity Treasuries rose more than long-dated issues. Inflation pressures and the prospect of interest-rate hikes are whipsawing bond markets. The U.S. dollar strengthened the most since June and crude oil gained.

The Stoxx Europe 600 Index erased losses, but still secured its fourth straight weekly advance.

European bonds extended Thursday’s retreat as data on Eurozone economic growth and inflation topped analysts’ estimates, reinforcing growing conviction that interest-rate increases are on the horizon after the European Central Bank president only offer a mild pushback against traders’ bets on a hike as soon as October next year.

Markets are grappling with a number of crosscurrents. Generally positive corporate performance has helped to underpin global equities. But inflation risks from supply-chain snarls and costlier raw materials are boosting expectations for rate hikes and dimming the economic outlook.

“Almost any data series you look at, be it the bond market, be it inflation, GDP, the labor market, anything is still showing these signs of fibrillation and that’s going to take some time to sort out,” said Scott Clemons, chief investment strategist at Brown Brothers Harriman, on Bloomberg Radio and TV’s “Surveillance.”

The latest data showed U.S. growth slowed more than expected in the third quarter, hampered by supply chains and a surge in Covid-19 cases. A separate report showed that weekly jobless claims fell to a pandemic low, and personal spending slowed in line with analysts’ estimates in September.

In cryptocurrencies, Bitcoin rose to $62,200 and Ether rallied to a record high.

For more market analysis, read our MLIV blog.

Stocks

  • The S&P 500 was little changed as of 2:46 p.m. New York time

  • The Nasdaq 100 rose 0.1%

  • The Dow Jones Industrial Average was little changed

  • The MSCI World index fell 0.4%

Currencies

  • The Bloomberg Dollar Spot Index rose 0.7%

  • The euro fell 1% to $1.1560

  • The British pound fell 0.7% to $1.3692

  • The Japanese yen fell 0.3% to 113.92 per dollar

Bonds

  • The yield on 10-year Treasuries declined two basis points to 1.56%

  • Germany’s 10-year yield advanced three basis points to -0.11%

  • Britain’s 10-year yield advanced three basis points to 1.03%

Commodities

  • West Texas Intermediate crude rose 0.6% to $83.33 a barrel

  • Gold futures fell 1.1% to $1,783.60 an ounce

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©2021 Bloomberg L.P.



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Oliver Bolt

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