U.S. Stocks Push Higher As Upbeat Mood Prevails: Markets Wrap

(Bloomberg) -- US stocks continued to climb Wednesday, with traders positive about the economy after business activity data topped estimates and technology companies reported robust earnings. 

The S&P 500 was boosted by advances in Nvidia Corp. and Microsoft Corp. The Nasdaq 100 added to earlier gains. Netflix Inc.’s shares soared after subscriber numbers surpassed expectations. The US 10-year yield lingered around 4.14%. The Bloomberg Dollar Spot Index remained lower. 

US data showing business activity expanded in January by the most in seven months bodes well for stocks, according to Renaissance Macro’s Neil Dutta.

“Growth is up and inflation is down. The former puts a ceiling on how many cuts the Federal Reserve will do while the latter means the Fed still ends up cutting,” he said. “Very good scenario for equity markets.”

With earnings due later in the day from Tesla Inc. and International Business Machines Corp., the spotlight remains on the tech sector. So far, the US earnings season has indicated companies are coping well with higher interest rates. 

Fundstrat Global Advisors LLC’s Tom Lee expects an equities rally to eventually extend beyond just last year’s high-flying tech stocks.

“With Fed signaling future cuts, the 5% earned on money market has a short shelf life,” he wrote in a note to clients. “Thus, we see the $5.5 trillion in money markets moving to equities — of course, not the full balance. But any moves would be positive for stocks and for expanding market breadth.”

Read: Hedge Fund Stars Who Got China Wrong Are Paying a Big Price 

Meanwhile, Bank of Canada held its key interest rate at 5%, as expected, and signaled it’s done hiking. Also on the roster this week is European Central Bank’s policy meeting on Thursday. Euro-area bond yields slipped earlier after data showed business activity contracted in January for the eighth month. 

Elsewhere, industrial metals prices received a boost after China signaled plans to stimulate its economy by cutting the reserve requirement ratio for banks. The move should allow Chinese banks to step up lending and their purchases of government bonds. The news also supported Brent crude around $80 a barrel.  

Key events this week:

• Eurozone ECB rate decision, Thursday
• Germany IFO business climate, Thursday
• US GDP, initial jobless claims, durable goods, wholesale inventories, new home sales, Thursday
• Japan Tokyo CPI, Friday
• US personal income & spending, Friday
• Bank of Japan issues minutes of policy meeting, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.8% as of 12:54 p.m. New York time
• The Nasdaq 100 rose 1.5%
• The Dow Jones Industrial Average rose 0.4%
• The MSCI World index rose 0.1%

Currencies

• The Bloomberg Dollar Spot Index fell 0.5%
• The euro rose 0.5% to $1.0906
• The British pound rose 0.5% to $1.2748
• The Japanese yen rose 0.8% to 147.20 per dollar

Cryptocurrencies

• Bitcoin rose 2.2% to $40,063.24
• Ether rose 1.4% to $2,233.21

Bonds

• The yield on 10-year Treasuries advanced two basis points to 4.14%
• Germany’s 10-year yield declined one basis point to 2.34%
• Britain’s 10-year yield advanced two basis points to 4.01%

Commodities

• West Texas Intermediate crude rose 1.3% to $75.33 a barrel
• Spot gold fell 0.5% to $2,018.66 an ounce

This story was produced with the assistance of Bloomberg Automation.

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.