BLBG: S&P 500 Rises With Dollar on GDP; Europe Stocks Advance
The Standard & Poor’s 500 Index rose, extending a record, and the dollar strengthened after the economy grew more than estimated. European stocks gained for a third day as German equities rallied.
The S&P 500 added 0.1 percent at 9:31 a.m. in New York, poised for a fourth day of gains. The Stoxx Europe 600 Index rose 0.4 percent, as Germany’s Dax Index headed the longest rally since May 2013. Spain’s 10-year yield fell four basis points to 1.94 percent. The Bloomberg Dollar Spot Index touched a five-year high, while Treasuries erased gains. Brent fluctuated before a meeting of oil exporters this week.
The U.S. economy expanded more than previously forecast in the third quarter amid bigger gains in consumer spending and business investment, Commerce Department data showed before a report that may indicate consumer confidence rose. Germany’s economy, Europe’s largest, gained 0.1 percent in the three months through September, confirming a Nov. 14 estimate.
“The GDP number builds the argument that going forward the economy continues to grow at a reasonable pace,” Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates in Bethlehem, Pennsylvania, said in a phone interview. “When you look at the fact that consumer and business spending pushed the GDP number higher, those are both positive for the outlook on equities. It pays to be in stocks.”
U.S. GDP
The U.S. economy expanded at a 3.9 percent annualized rate in the third quarter, up from an initial reading of 3.5 percent and more than the 3.3 percent median estimate in a Bloomberg survey, Commerce Department data show.
The S&P 500 has rallied 11 percent from its low last month as data signaled the U.S. economy is improving, European Central Bank President Mario Draghi pledged to raise inflation as fast as possible, and China unexpectedly cut interest rates.
A Conference Board release at 10 a.m. local time will probably show consumer confidence climbed for a second month, extending a seven-year high.
The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major counterparts, rose 0.1 percent to 1,102.63. It reached 1,102.87, the highest level on a closing basis since March 2009.
The yen strengthened 0.1 percent to 118.14 per dollar, after gaining by as much as 0.5 percent earlier. It reached 118.98 on Nov. 20, the weakest since August 2007. The dollar added 0.2 percent to $1.2415 per euro.
Dax Rally
In Europe, an index of banks rose the most among 19 industry groups in the Stoxx 600 today. The index closed at a two-month high yesterday.
The Dax rallied 1.1 percent, poised for a ninth day of gains. The gauge is heading for its highest close since July and has rebounded 16 percent from a one-year low in October.
HSBC Holdings Plc added 1.3 percent and Societe Generale SA climbed 2.3 percent. Deutsche Bank AG increased 2.5 percent. Banco Santander SA advanced 1.8 percent after the Spanish lender named Jose Antonio Alvarez as its new chief executive officer.
The Stoxx 600 has rallied 12 percent from its low last month as Mario Draghi said the European Central Bank may start buying buying government bonds. The stock gauge pared intraday gains yesterday as ECB Governing Council member Jens Weidmann said the central bank will face legal obstacles to buying government debt.
While the ECB won’t make a hasty decision on stimulus, there’s “unanimous agreement that there might be situations where we’d have to do more,” Executive Board member Benoit Coeure said in an interview yesterday.
Bit Lower
“Low inflation is the key,” said Jan von Gerich, an analyst at Nordea Bank AB in Helsinki. “Clearly people are now expecting even faster action from the ECB. I think we will go a bit lower in yield terms” in European bonds this year, he said.
Germany’s 10-year yield declined two basis points to 0.76 percent and the rate on similar-maturity Treasury notes also slipped two basis points, to 2.29 percent.
Belgium’s 10-year yield fell as much as three basis points today to a record 1.02 percent, Austria’s touched an all-time low of 0.92 percent and France’s reached 1.083 percent.
Hewlett-Packard Co., Campbell Soup Co. and Tiffany & Co. are among companies releasing earnings. About 79 percent of the S&P 500 companies that have reported earnings this season beat analysts’ estimates for profit, while 60 percent exceeded sales projections, data compiled by Bloomberg show.
The MSCI Emerging Markets Index fell for the first time in six days, losing 0.1 percent and falling from a three-week high.
China, Russia
The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in Hong Kong slipped 0.6 percent after its biggest gain in a year yesterday. The Shanghai Composite Index gained 1.4 percent to a three-year high.
The Micex fell for a second day and the ruble weakened for the first time in seven days, ending the longest rally in more than a year.
Russia stands to lose as much as $140 billion a year as a result of lower oil prices and U.S. and European sanctions, Finance Minister Anton Siluanov said yesterday.
U.K. natural gas rose for a seventh day, the longest streak since March 2013, on forecasts for colder weather and field outages in Norway fueled speculation. Front-month gas in the U.K., Europe’s biggest market, climbed 1.8 percent. Cocoa and silver led commodities higher with gains of more than 1.2 percent. Gold traded at $1,197.89 an ounce, near a three-week high.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Joseph Ciolli in New York at jciolli@bloomberg.net
To contact the editors responsible for this story: Stephen Kirkland at skirkland@bloomberg.net; Stuart Wallace at swallace6@bloomberg.net Stuart Wallace
