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Tech Pulls Stocks Higher on Eve Powell Report

Tech Pulls Stocks Higher on Eve Powell Report
Federal Reserve Chair Jerome Powell (Getty Images)

Tuesday, 09 July 2019 04:34 PM

U.S. stocks closed a whisker higher after treading water for most of the session as markets braced for an onslaught of central bank news this week. The dollar strengthened to its highest level since mid-June and Treasuries slipped.

The S&P 500 Index perked up just before the close Tuesday, with gains in technology shares helping to offset a slump in materials and consumer staples. So-called FAANG shares -- including Amazon.com Inc. and Facebook Inc. -- led advancers in the equity benchmark.

Trading may stay choppy ahead of key testimony this week from Federal Reserve Chair Jerome Powell as observers assess prospects for easing following conflicting signals on the global economy. Stock and bond investors are struggling to find fresh reasons to chase this year’s rallies, but an interest rate cut by the Fed this month is already priced and recent economic data has been mixed, making the path for future policy less clear.

“Powell is likely to walk a fine line between the hawks and doves in his testimony -- giving a nod to the underlying strength in the domestic economy on the one hand, while also acknowledging the persistently subdued inflation backdrop and global uncertainties on the other,” said Candice Bangsund, vice president and portfolio manager at Fiera Capital Corp.

The Stoxx Europe 600 Index closed lower after the world’s largest chemical company, BASF, slashed its 2019 earnings forecast, blaming global trade conflicts. Stocks reversed gains in Japan, fluctuated in South Korea and saw modest slides in Hong Kong and China. Italian bonds rose as the country took advantage of low borrowing costs to sell 50-year bonds. The Mexican peso slid after the country’s finance minister announced his resignation.

Elsewhere, West Texas intermediate crude gained following a report that Russian output declined. Bitcoin extended Monday’s 11% jump. The pound weakened as economists predicted the U.K. economy likely shrank for the first time since 2012 in the second quarter.

Hong Kong’s dollar dipped as the city’s leader Carrie Lam said a controversial bill that would allow extraditions to China was “dead,” but stopped short of saying she’d withdraw the legislation after weeks of protests.

Here are some key events coming up:

  • Powell testifies before Congress on monetary policy and the state of the U.S. economy on Wednesday (the House of Representatives) and Thursday (the Senate).
  • Fed minutes are due on Wednesday, ECB minutes on Thursday.
  • A key measure of U.S. inflation -- the core consumer price index, due Thursday -- is expected to have increased 0.2% in June from the prior month, while the broader CPI is forecast to remain unchanged.
  • U.S. producer prices are due on Friday.

Here are the main moves in markets:

Stocks

  • The S&P 500 Index gained 0.1% as of 4:01 p.m. New York time.
  • The Stoxx Europe 600 Index sank 0.5% to the lowest in more than a week.
  • The U.K.’s FTSE 100 Index decreased 0.2%.
  • Germany’s DAX Index slid 0.9%, the biggest decrease in more than five weeks.
  • The MSCI Emerging Market Index fell 0.4%.

Currencies

  • The Bloomberg Dollar Spot Index rose 0.2% to its highest in three weeks.
  • The British pound fell 0.4% to $1.2464, the weakest in more than two years.
  • The euro decreased 0.1% to $1.1207, the lowest in three weeks.
  • The Japanese yen weakened 0.2% to 108.89 per dollar.
  • The Mexican peso dropped 1.1% to 19.1273 per dollar, the biggest tumble in over five weeks.

Bonds

  • The yield on 10-year Treasuries rose one basis point to 2.06%, a three-week high.
  • Germany’s 10-year yield increased one basis point to -0.35%, the highest in more than a week.
  • Britain’s 10-year yield rose one basis point to 0.72%.

Commodities

  • West Texas Intermediate crude gained 0.6% to $58.02 a barrel.
  • Gold rose 0.1% to $1,396.76 an ounce.

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U.S. stocks closed a whisker higher after treading water for most of the session as markets braced for an onslaught of central bank news this week. The dollar strengthened to its highest level since mid-June and Treasuries slipped.The S&P 500 Index perked up just before the...
markets, tech, stocks, federalreserve
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2019-34-09
Tuesday, 09 July 2019 04:34 PM
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