U.S. stocks fluctuated as investors weighed positive corporate earnings against persistent concerns over trade and another government shutdown. The dollar extended its rally to a fifth day.
The S&P 500 was little changed after halting a four-day advance, with President Donald Trump’s speech to Congress having little impact on markets. Among earnings-related moves, General Motors rose after topping profit estimates, while Snap soared as its user base stabilized. Microchip Technology’s call for a bottom in the chip cycle boosted semiconductor makers, while Electronic Arts and Take Two plunged posted disappointing numbers.
Investors remained on edge with the deadline for Congress to reach a deal on keeping the government open fast approaching with little sign of compromise. There are also looming meetings in Beijing next week between U.S. trade representatives and their Chinese counterparts.
In other moves, iron ore surged to near a two-year high after Vale raised worries of a global shortfall. Crude slumped below $53.50 a barrel in New York. Bloomberg’s dollar index headed for its best run in more than two weeks, with the green back rising above key technical levels that force short sellers to cut back. The 10-year Treasury yield fell.
Vale’s force majeure boosts iron ore and producers of the mineral
The Stoxx Europe 600 also edged higher, heading for a seventh day rising as technology stocks rallied on some upbeat company reports. Car makers were among the laggards after Daimler AG’s cautious tone reignited concern about global trade. Bonds across the region were range bound, though Italian notes slipped as the country sold new debt.
Asia saw another muted session as the Lunar New Year holiday continued. Australia’s dollar tumbled after the central bank chief signaled a shift to a neutral stance on policy. Iron ore rallied toward $90 a metric ton after Brazil’s Vale SA declared force majeure on some contracts, raising the prospect of a deficit of the commodity this year.
Global equities are close to levels not seen since November, in part spurred by the Federal Reserve’s tilt toward a neutral policy stance. Further clues on what 2019 holds may come Wednesday from Chairman Jerome Powell’s first public comments following the January meeting and interest-rate decision.
Meanwhile, West Texas oil held below $54 a barrel after an industry report pointed to a rise in U.S. crude inventories.
Frontpage November 6, 2019