Emerging-market stocks climb to highest since August Investors weigh prospects for economy versus Fed rate move Share on Facebook Share on Twitter The dollar strengthened and Treasuries fell as investors reassessed prospects for the global economy after reports showed unexpected strength in the U.S. labor market and rising inflation. U.S. stocks rose with European equities. The yield on Treasury 10-year notes rose three basis points to 2.01 percent and the Bloomberg Dollar Spot Index rebounded after reports showed jobless claims fell and consumer prices in the U.S. excluding food and fuel rose more than forecast in September. European shares jumped after three days of declines and the Standard & Poor’s 500 Index gained amid corporate earnings reports. U.S. oil fell for a fourth day. "Until the Fed gives us some other form of guidance or frame to look at the market other than data dependence, then we’re going to be playing this game with every data point," said Neil Bouhan, an interest-rate strategist at BMO Capital Markets in Chicago. Investors are weighing the impact of a slowdown in the global economy and prospects for the Federal Reserve to raise interest rates. Economic data from Group of 10 nations are missing analysts’ estimates by the most in four months, according to a Citigroup Inc. index, including weaker-than-expected U.S. retail sales, and slowdowns in Japan, China, the U.K. and Germany. That’s caused investors to almost rule out a Fed rate increase this year, and helped cut global bond yields to a five-month low. Stocks The MSCI All-Country World Index climbed 0.7 percent at 9:36 a.m. in New York. The gauge has lost about 5 percent since the end of June weighed down by the collapse of China’s equity bubble, the shock devaluation of the yuan and slowing growth globally. The Standard & Poor’s 500 Index rose 0.3 percent after the gauge slid for two days. Netflix Inc. fell 6.1 percent after third-quarter U.S. subscriber growth missed analysts’ estimates. Goldman Sachs Group Inc. slipped 1.6 percent after reporting third-quarter profit that missed analysts’ estimates as the global market turmoil took a bigger toll on its trading revenue than at rivals. Citigroup Inc. gained 1.1 percent as profit beat estimates. The Stoxx Europe 600 Index rose 1.2 percent, led by technology and financial companies. Unilever climbed 4.5 percent in London after boosting its full-year sales forecast. Burberry Group Plc tumbled 8.1 percent after reporting lower sales in Asia and indicating that full-year profit will probably decline for the second year. Currencies The dollar index jumped 0.3 percent, as the currency climbed 0.7 percent to $1.1384 per euro. It also gained 0.2 percent against the pound and pared declines against the yen. European Central Bank policy maker Ewald Nowotny said the institution is “clearly missing� its inflation targets. Bonds Sovereign bond yields in developed markets slid to 0.96 percent on average Wednesday, the lowest level since April 30, according to Bloomberg World Bond Indexes. The probability of a Fed increase by the December policy meeting has dropped to 30 percent, down from 70 percent at the start of August, according to futures data compiled by Bloomberg. The calculations are based on the assumption the effective fed funds rate will average 0.375 percent after liftoff. Emerging Markets The MSCI Emerging Markets Index advanced 2 percent, the first gain in three days. Benchmark equity gauges in China, South Korea, Turkey, Thailand and the Philippines climbed at least 1 percent. The Shanghai Composite Index added 2.3 percent and the Hang Seng China Enterprises Index rose 2.1 percent in Hong Kong. A Chinese plan to reorganize the telecom industry raised speculation the government will accelerate reforms of state-owned companies to revive economic growth. The Jakarta Composite Index gained 0.5 percent and the rupiah appreciated 1.5 percent. Indonesia will announce stimulus measures on Thursday including a formula for regular minimum wage increases, Coordinating Minister for Economic Affairs Darmin Nasution said on Monday. Indonesia’s central bank kept its main interest rate unchanged for an eighth month, in line with forecasts. Egypt’s central bank devalued its currency for the third time this year after foreign reserves tumbled and the current account deficit widened to the most in at least 15 years. The nation’s pound weakened 1.3 percent. Commodities West Texas Intermediate crude dropped 1.8 percent to $45.79 a barrel as rising crude supplies bolstered speculation a global surplus is persisting. Industry data indicated U.S. oil stockpiles expanded by 9.3 million barrels last week, with analysts forecasting a government report Thursday to show an increase of 2.58 million barrels. Brent fell 1.4 percent to $48.45. Gold for immediate delivery was little changed at $1,184.96 an ounce after touching the highest level since late June on Wednesday. The metal climbed above its 200-day moving average Wednesday for the first time in about five months.

Source