February 29, 2024
Finance

Treasuries Trim Gains, Stocks Edge Up After Data: Markets Wrap


(Bloomberg) — US Treasuries held onto gains while stocks struggled to resume their climb after a fresh batch of data left traders measuring the chances a soft landing for the world’s largest economy.

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The yield on the US 10-year was down three basis points after reaching July levels before the reports, the benchmark rate is down more than 40 basis points this month. Sales of previously owned US homes edged higher in November off of a 13-year low, National Association of Realtors data showed Wednesday, following earlier data showing mortgage rates fell to their lowest since June. Separately, US consumer confidence in December rose by the most since early 2021.

“While a sustained improvement in confidence would be a positive signal about consumer attitudes and spending, a loosening in labor market conditions owing to a restrictive policy stance is likely to weigh on demand, consumption and growth going forward,” Rubeela Farooqi at High Frequency Economics wrote.

Stocks edged higher with Nasdaq 100 advancing 0.3% after the tech-heavy benchmark notched record highs for three successive sessions. The S&P 500 rose 0.1%. Diminishing profits from FedEx Corp., widely seen as a bellwether for US economic outlook, heightened concerns about an economic slump. The delivery company’s shares dropped 10% in New York trading.

British 10-year debt led a global bond rally following data showing a slowdown in UK inflation. An auction of 20-year Treasuries this afternoon could also spur fresh moves in the market.

“There is a risk that a weak auction outcome could pour some cold water on bonds and lead to some profit taking in equities ahead of more critical economic data due in the back half of the week,” Tom Essaye, the founder of The Sevens Report newsletter, wrote.

A recent dovish pivot from the Fed set the stage for the latest leg of equity and bond rallies.

Bond bulls got fresh encouragement Tuesday from Richmond Fed President Thomas Barkin, who suggested the US central bank would “respond appropriately” if recent progress on inflation continued.

Investors will next seek guidance from upcoming US data readouts, including existing home sales figures on Wednesday, Thursday’s GDP print and Friday’s data on personal consumption expenditures — the Fed’s preferred inflation gauge.

Meanwhile, they are starting to weigh risks stemming from potential shipping delays and freight cost increases, as companies divert cargoes away from the Red Sea to avoid militant attacks. This rerouting will mean higher shipping costs and longer delivery time, Bloomberg Economics wrote in a note.

Crude oil extended gains, while gold fell.

Key events this week:

  • US Conference Board consumer confidence, existing home sales, Wednesday

  • Bank Indonesia rate decision, Thursday

  • US GDP, initial jobless claims, Conf. Board leading index, Thursday

  • Nike earnings, Thursday

  • Japan inflation, Friday

  • UK GDP, Friday

  • US personal income and spending, new home sales, durable goods, University of Michigan consumer sentiment index, Friday

Some of the main moves in markets:

Stocks

  • The S&P 500 rose 0.1% as of 10:32 a.m. New York time

  • The Nasdaq 100 rose 0.3%

  • The Dow Jones Industrial Average was little changed

  • The Stoxx Europe 600 rose 0.2%

  • The MSCI World index rose 0.2%

Currencies

  • The Bloomberg Dollar Spot Index was little changed

  • The euro fell 0.2% to $1.0964

  • The British pound fell 0.5% to $1.2666

  • The Japanese yen rose 0.2% to 143.58 per dollar

Cryptocurrencies

  • Bitcoin rose 4% to $44,182.95

  • Ether rose 3.1% to $2,253.85

Bonds

  • The yield on 10-year Treasuries declined three basis points to 3.90%

  • Germany’s 10-year yield declined three basis points to 1.98%

  • Britain’s 10-year yield declined 11 basis points to 3.54%

Commodities

  • West Texas Intermediate crude rose 1% to $74.70 a barrel

  • Spot gold fell 0.4% to $2,032.69 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Sujata Rao, Alice Atkins, Tassia Sipahutar, Yumi Teso and Michael Msika.

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©2023 Bloomberg L.P.



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