BLBG:Global Stocks Set for Bull Market as Commodities Rise on Greek Debt Talks
Stocks climbed, with the MSCI All- Country World Index set to enter a bull market, and commodities extended the longest rally this year as Greek leaders worked on a rescue plan with creditors. Toyota Motor Corp. (7203) led automakers higher after raising its profit forecast.
The MSCI index climbed 0.4 percent at 6:55 a.m. in New York, extending gains to more than 20 percent from its closing low on Oct. 4. Standard & Poor’s 500 Index futures added 0.1 percent. A gauge of commodities rose to a six-month high. The yield on German 10-year bunds advanced two basis points. The yen weakened against all 16 major peers, losing 0.4 percent versus the euro.
Greek Prime Minister Lucas Papademos will meet with the nation’s political leaders to negotiate terms required for a 130 billion-euro ($172 billion) rescue package. Copper stockpiles fell to the lowest since September 2009, the London Metal Exchange said today, a day after a report showed U.S. oil inventories dropped. Toyota, Asia’s largest carmaker, raised its net income, operating profit and revenue forecasts for the year ending March 31.
“Be 100 percent in equities,” Laurence D. Fink, chief executive officer of BlackRock Inc., the world’s largest money manager, said in a Bloomberg Television interview from Hong Kong today. “I don’t have a view that the world is going to fall apart, so you need to take on more risk. You need to overcome all this noise and there are great values in equities.”
Fear Index
While geo-political risks have risen, including Iran’s nuclear ambitions and Syria’s bloody crackdown, investors are taking their cue from policy makers who are driving down interest rates and flooding the world with cash to prop up their economies. The VIX, a measure of equity volatility known as the “fear index,” fell to 17.1 on Feb. 3, the lowest level since July, according to the Chicago Board Options Exchange.
The Stoxx Europe 600 Index advanced 0.3 percent, the first gain in three days, as banks and mining companies rallied. Portuguese lenders Banco Comercial Portugues SA, Banco Espirito Santo SA and Banco BPI SA all surged more than 12 percent. Reckitt Benckiser Group Plc climbed 3.2 percent as the maker of Nurofen painkillers and Dettol handwash said 2012 sales will increase at a faster pace than the industry.
Toyota climbed 5 percent in Tokyo trading.
The S&P 500 closed at a seven-month high yesterday. Visa Inc., Moody’s Corp. and Time Warner Inc. are among U.S. companies scheduled to report earnings today. Profits have beaten estimates at 68 percent of the 287 companies in the S&P 500 that have released results since Jan. 9, data compiled by Bloomberg show.
$24 Billion Auction
The yield on the 10-year U.S. Treasury rose one basis point before the government auctions $24 billion of the securities, the second of three auctions this week totaling $72 billion.
The German five-year note yield increased one basis point to 0.92 percent. The government got bids for 5.87 billion euros ($7.78 billion) of five-year notes at an auction today, exceeding the maximum sales target of 4 billion euros, the Bundesbank said in a statement.
Spanish 10-year bonds slid, driving the yield 18 basis points higher as the nation plans to add to its outstanding supply of the securities due in January 2022, according to a banker involved in the transaction. The yield on the Greek October 2022 bond fell 106 basis points, or 1.06 percentage points, to 33.10 percent, with the price rising to 21.52 percent of face value.
Papademos held an unscheduled meeting with the so-called troika, comprising the European Commission, the European Central Bank and the International Monetary Fund, to put the final touches on terms required for rescue package.
Default Risk
The cost of insuring against a default on European government bonds fell to the lowest since Oct. 31, with the Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments declining two basis points to 316.
The euro strengthened 0.1 percent to $1.3274, appreciating for the second consecutive day, while the New Zealand dollar rose against all 16 most actively traded peers.
The S&P GSCI gauge of 24 commodities rose as much as 0.8 percent to the highest since Aug. 3. Copper gained 1.4 percent. Stockpiles of the metal fell to the lowest since September 2009, the LME said. Oil in New York gained 1.2 percent to $99.60 a barrel. U.S. crude inventories fell 4.5 million barrels in the seven days ended Feb. 3, the first drop in three weeks, the American Petroleum Institute said yesterday.
The MSCI Emerging Markets Index rose 1.2 percent, heading for the highest close since Aug. 4. The Shanghai Composite Index advanced 2.4 percent and Taiwan’s Taiex Index jumped 2.1 percent. Russia’s Micex Index advanced for the first day this week, increasing 0.7 percent, as UBS AG upgraded the country’s equities to “overweight.”
The FTSE/JSE Africa All Share Index climbed 0.6 percent in Johannesburg as prices for industrial metals rose. The ISE National 100 Index gained 0.7 percent in Istanbul.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net;
To contact the editor responsible for this story: Stuart Wallace at Swallace6@bloomberg.net
