BLBG: U.S. Stocks, Dollar Rise as Treasuries Slump Amid Economic Data
U.S. stocks rose with the dollar, while Treasuries extended the biggest weekly drop in a year as data on manufacturing and retail sales bolstered optimism in the economy. European equities halted this week’s rally amid a deadly terror attack in Nice.
The S&P 500 Index pushed toward a fifth straight record, though gains were muted after an 8.2 percent rally over three weeks. Emerging-market shares climbed a seventh day to the highest since November amid signs of stabilization in China’s economy. The yield on the 10-year Treasury note pushed gains in the five days to 21 basis points after touching a record low on July 6. Gold headed for its first weekly loss since May.
U.S. stocks rose with the dollar, while Treasuries extended the biggest weekly drop in a year as data on manufacturing and retail sales bolstered optimism in the economy. European equities halted this week’s rally amid a deadly terror attack in Nice.
The S&P 500 Index pushed toward a fifth straight record, though gains were muted after an 8.2 percent rally over three weeks. Emerging-market shares climbed a seventh day to the highest since November amid signs of stabilization in China’s economy. The yield on the 10-year Treasury note pushed gains in the five days to 21 basis points after touching a record low on July 6. Gold headed for its first weekly loss since May.
The S&P 500 rose 0.2 percent to 2,168.15 at 9:31 a.m. in New York, headed for a sixth straight gain, the longest run since June 2014. The index has climbed 1.8 percent in the past five days. The Stoxx Europe 600 Index fell 0.1 percent, after dropping as much as 0.7 percent. The gauge is still heading for a weekly gain of 3.1 percent on optimism major central banks will step up support to the economy.
A gauge of European travel companies fell for the first time in seven days, with Thomas Cook Group Plc and EasyJet Plc declining at least 2.8 percent.
The MSCI Emerging Markets Index rose 0.2 percent, extending the weekly advance to 4.8 percent, the most in four months. Taiwan’s Taiex index entered a bull market, advancing more than 20 percent from a low in August. The Hang Seng China Enterprises Index boosted this week’s gain to 6 percent and the Shanghai Composite Index held near a three-month high.
China’s economic growth was 6.7 percent in the second quarter, beating the 6.6 percent expansion forecast in a Bloomberg survey of economists. Figures for factory output, retail sales and new lending also topped estimates, while investment slowed.
Currencies
The Bloomberg Dollar Spot Index advanced as much as 0.2 percent after dropping 0.1 percent.
The yen slipped 0.5 percent to 105.91 per dollar, headed for a 4.9 percent weekly loss that would be its steepest slide in 17 years. Ben S. Bernanke, the former chairman of the Federal Reserve, met Japanese leaders in Tokyo this week and was reported to have previously floated the idea of the nation issuing perpetual bonds.
The pound was poised for its biggest weekly rally since 2009 after the appointment of Theresa May as Prime Minister returned a sense of political stability to the U.K. and the Bank of England unexpectedly kept interest rates unchanged.
Commodities
Crude oil rose 0.9 percent to $46.10 a barrel in New York, reversing earlier losses.
Gold slid 0.4 percent, headed for a weekly decline of 2.7 percent.
Zinc advanced 1.4 percent to the highest level in 13 months, while copper headed for the biggest weekly increase since March after China data bolstered the outlook for demand. The London Metal Exchange Index of six base metals rose for the fifth day on Thursday to the highest since October.
Bonds
Treasuries snapped a record-setting rally this week as the early resolution of Britain’s leadership vacuum eased the flight to safety that was sparked by the June 23 referendum. The Bloomberg Treasury Index was poised for its biggest loss in eight months. The benchmark 10-year yield climbed three basis points to 1.56 percent after after sinking to an all-time low of 1.32 percent on July 6.
“We were really worried about Brexit, but suddenly U.K. politics have stabilized,” said Kim Youngsung, the head of overseas investment in Seoul at South Korea’s Government Employees Pension Service, which has $13.2 billion in assets. “Yields probably won’t fall further.”
The cost of insuring corporate debt against default was set for a third straight weekly decline. The Markit iTraxx Europe Index of credit default swaps on investment-grade companies was little changed at 70 basis points. A gauge of swaps on junk-rated issuers rose two basis points to 319 basis points.
