U.S. stocks pushed to fresh records as technology shares continued their torrid start to the year. The dollar gained with Treasury yields as bets increased for a hike in U.S. borrowing costs next month, damping a rebound in commodities.
The S&P 500 Index climbed past 2,400, with tech companies driving gains this year to 17 percent. Bloomberg’s Dollar Spot Index showed the greenback at the highest in almost a month in the wake of a hawkish speech on Monday by Fed official Loretta Mester. Treasuries were steady. Oil slipped toward $46 a barrel on glut concerns. Still, basic resources shares were the biggest winners as the Stoxx Europe 600 Index advanced.
Calm blanketed financial markets, with measures of equity and fixed-income volatility at multiyear lows after the dissipation of concerns over European populism in the wake of theFrench election. Impending central bank meetings, a potential unwind of the Federal Reserve balance sheet and more scheduled elections have so far failed to dent optimism.
“Does the lack of fear reflect an exhausted, tired market that believes zero volatility is normal, or is it an example of enormous complacency?” Bill Blain, a strategist at Mint Partners in London, asked in a note to clients.
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Key events this week:
- Investors will be parsing comments from Federal Reserve Bank of Minneapolis. President Neel Kashkari later Tuesday for any clues on U.S. central bank policy.
- Earnings continue to be released with Walt Disney Co., Mitsubishi Corp., Toyota Motor Corp. and Deutsche Telekom AG among those notable.
- The Bank of England on Thursday publishes its interest-rate decision and quarterly Inflation Report.
Here are the main moves in markets:
- The S&P 500 climbed 0.1 percent to 2,401.60 as of 11:04 a.m. in New York.
- The CBOE Volatility Index edged higher, but stayed below 10 after closing Monday at the lowest since December 1993.
- The Stoxx Europe 600 added 0.5 percent, the highest since August 2015. Miners rose 1.7 percent.
- The Bloomberg Dollar Spot Index advanced 0.3 percent after jumping 0.5 percent on Monday.
- The euro traded at $1.0886, down 0.4 percent. The currency fell 0.7 percent Monday following Macron’s victory as France’s next president, after trading at the highest level since November.
- The yield on 10-year Treasury notes rose one basis point to 2.40 percent after climbing four basis points on Monday.
- France 10-year yields increased three basis points to 0.88 percent. Similar maturity German yields increased one basis point, to 0.43 percent.
- Gold futures dropped 0.5 percent to $1,220.60 an ounce, even after the China Gold Association said demand in the biggest consumer could jump to a four-year high.
- West Texas Intermediate oil slipped 0.4 percent to $46.23 a barrel.
- Copper for delivery in three months rose 0.5 percent after Monday closing at the lowest level since Dec. 23.
- Asian stocks slipped after a rally to a two-year high on Monday. Japan’s Topix retreated from the highest level since December 2015.
- Chinese shares rose after a five-day selloff brought the Shanghai Composite Index to the lowest level since October.
- The Aussie fell to the lowest level since January after disappointing retail sales data.
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Frontpage October 23, 2019