Stocks End Record-Setting Week With Further Gains: Markets Wrap

(Bloomberg) -- U.S. equities closed at a record high for a second straight day, and recorded a second consecutive weekly advance, as investors remained cautiously optimistic about prospects for easier monetary policy, despite a bigger-than-projected rise in a key inflation measure. The dollar retreated for a third day.

The S&P 500 Index rose Friday, led by technology and industrial shares, while drug stocks continued to weigh on the benchmark. An unexpected increase in American producer prices seemed to do little to alter investor sentiment toward the Federal Reserve’s next policy move. Treasury 10-year yields slipped.

“The important thing is that the Fed has reassured the market that ‘Hey, we’re not hiking rates anymore and we may actually ease, if necessary,”’ Scott Wren, a senior global equity strategist at Wells Fargo Investment Institute, told Bloomberg TV. “I think that’s really what the market wanted. It’s a very important concept that global central banks -- and you could have said this for the last several months -- they’re not in hiking mode anymore. They are in easing mode.”

The Stoxx Europe 600 eked out its first gain of the week, while shares dipped in Australia and Japan and posted modest gains in Hong Kong, China and South Korea. Emerging-market shares declined. Government bonds extended declines in Europe, heading for the worst week since at least October, after industrial output data for the euro region beat expectations. The single currency advanced.

The rally in risk assets is continuing to benefit from Federal Reserve Chairman Jerome Powell’s dovish comments this week, even after strong U.S. consumer inflation data on Thursday offered a potential complication to policy makers when they set rates at the end of the month.

Meanwhile, weak data from both Singapore and China sent another warning shot to the world economy on the impact of trade tensions. The reports came after President Donald Trump complained that China hasn’t increased its purchases of American farm products, a promise he said he had secured at his G-20 meeting with the country’s president Xi Jinping last month.

Elsewhere, West Texas intermediate crude gained as operators in the Gulf of Mexico braced for Tropical Storm Barry. The lira weakened after Turkey said it started receiving parts of a Russian-made missile defense system, a move opposed by the U.S.

Here are the main moves in markets:

Stocks

• The S&P 500 Index climbed 0.5% as of 4:01 p.m. New York time.
• The Stoxx Europe 600 Index gained less than 0.05%.
• The U.K.’s FTSE 100 Index fell 0.1%.
• The MSCI Emerging Markets Index sank 0.3%.

Currencies

• The Bloomberg Dollar Spot Index declined 0.3% to the lowest in over a week.
• The euro rose 0.2% to $1.1271.
• The British pound advanced 0.4% to $1.2573, the strongest in more than a week.
• The Japanese yen climbed 0.6% to 107.86 per dollar, the biggest gain in over three weeks.

Bonds

• The yield on 10-year Treasuries declined three basis points to 2.11%, the biggest drop in over a week.
• Germany’s 10-year yield gained two basis points to -0.21%, the highest in more than five weeks.
• Britain’s 10-year yield decreased less than one basis point to 0.835%.

Commodities

• West Texas Intermediate crude increased 0.1% to $60.26 a barrel.
• Gold gained 0.8% to $1,414.69 an ounce.

--With assistance from Adam Haigh and Laura Curtis.

To contact the reporter on this story: Vildana Hajric in New York at vhajric1@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Andrew Dunn

©2019 Bloomberg L.P.