U.S. equities rose Monday along with stocks in Europe as traders took advantage of last week’s selloff to pick up shares at more favorable valuations.
The S&P 500 and Nasdaq 100 gained, building on a rebound that started late last week. The Stoxx Europe 600 index also climbed for a second day, with luxury stocks leading the advance.
Treasury yields pared back earlier gains and the dollar slipped for the first day in six. Investors are looking ahead to the Jackson Hole symposium Thursday, which may offer insights into how and when the Federal Reserve plans to taper bond purchases.
Some of the recent weakness in commodities abated, with oil in New York pushing above $64 a barrel. Commodity-linked currencies like the Australian dollar strengthened. Bitcoin retook $50,000 for the first time since mid-May. Gold rose above $1,800.
The dip-buying suggests investors have faith in central banks to maintain stimulus amid lingering risks to the global economy. Euro-area purchasing managers’ indexes on Monday signaled a strong recovery, though factories continue struggle with supply bottlenecks and rising input costs, while the virus resurgence casts a pall on the outlook. Traders will scrutinize U.S. manufacturing, gross domestic product and jobs data this week as they wait for further guidance from the Fed at Jackson Hole.
“We do not expect much of ‘breaking news’ to come from the Jackson Hole symposium, but rather some form of relief that the policy course remains lower for longer,” said Daniel Egger, the CIO at St. Gotthard Fund Management. “There appears to be growing consensus that the Fed will tread very cautiously in this regard.”
Dallas Fed President Robert Kaplan said he’s open to adjusting his view that the Fed should start tapering its asset-purchase program sooner rather than later if the delta strain persists and hurts economic progress. Treasury Secretary Janet Yellen endorsed Jerome Powell for a second term as Fed chair, a move that could reduce uncertainty about the path for monetary policy.
In Asia, equities gained in China and Japan during regular trading. On the virus front, China has once again brought local Covid-19 cases down to zero.
Here are some events to watch this week:
- U.S. Market manufacturing PMI and existing home sales Monday
- Bank of Korea policy decision; briefing by Governor Lee Ju-yeol Thursday
- Fed officials attend the Jackson Hole Economic Policy Symposium from Thursday through Saturday
- U.S. GDP, initial jobless claims Thursday
- July U.S. personal income and spending data Friday. Investors will scrutinize the personal consumption expenditures price index, an inflation measure closely watched by the Fed.
Some of the main moves in markets:
- The S&P 500 rose 0.4% as of 9:30 a.m. New York time
- The Nasdaq 100 rose 0.3%
- The Dow Jones Industrial Average rose 0.5%
- The Stoxx Europe 600 rose 0.4%
- The MSCI World index rose 0.7%
- The Bloomberg Dollar Spot Index fell 0.4%
- The euro rose 0.4% to $1.1740
- The British pound rose 0.5% to $1.3693
- The Japanese yen was little changed at 109.77 per dollar
- The yield on 10-year Treasuries was little changed at 1.26%
- Germany’s 10-year yield advanced one basis point to -0.48%
- Britain’s 10-year yield advanced two basis points to 0.54%
- West Texas Intermediate crude rose 4.3% to $64.81 a barrel
- Gold futures rose 1.3% to $1,806.90 an ounce
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