US Stock Rally Plows Forward Amid Peak-Rate Bets: Markets Wrap

(Bloomberg) -- US stocks rose on Wednesday as investors cheered cooling inflation in the UK and looked ahead to a kickoff in tech earnings due at the close of New York trading.

After hours, shares of Netflix Inc. fell after a third-quarter sales forecast missed estimates. Tesla Inc. wavered after a second-quarter earnings beat. And International Business Machines Corp. initially fell after missing sales estimates. 

During the regular session, Apple Inc. had gained after a Bloomberg report on its efforts to build AI tools, while Alphabet Inc. and Microsoft Corp. fell. Elsewhere, a profit slump at Goldman Sachs Group Inc. stood in contrast to beats earlier in the week from peer investment firms.

In bonds, US Treasuries joined a worldwide rally as price pressures in the UK dropped to the lowest in 15 months. The lateast inflation report bolstered hopes central banks can go easier on raising interest rates. However, shaky economic data have made clear the Federal Reserve is far from claiming victory. The price of commodities, including wheat, spiked midday on Wednesday after a warning from Russia that any ships to Ukraine would be seen as carrying arms. 

“The risk of recession has receded dramatically,” said Neil Dutta, head of economics at Renaissance Macro Research, on Bloomberg TV. “I think the markets are right to allocate a little bit more to the soft landing story, but I think you can make a good case that maybe we’re getting a little bit over our skis here and we should probably put some more potential on the resurgence of the inflationary-boom scenario.”

Carvana Co. gained  after the used-car retailer reached a deal to restructure its debt and filed to sell as much as $1 billion in stock. 

AT&T Inc. rose  after the telecommunications company reassured investors by saying less than 10% of its nationwide copper-wire telecom network had lead-clad cables. 

And Kering SA rose  in New York after it was said to be speaking to defense advisers as activist investors including Bluebell Capital Partners circle the French luxury group. 

In Asia, shares in Hong Kong and mainland China fell while the offshore yuan slid to the weakest level in more than a week. 

Investors see no easy fix to China’s economic slump, with fresh signs of financial stress among the nation’s dollar-bond issuers. Meanwhile, Rio Tinto Group said second-quarter shipments of iron ore fell 1% from a year earlier, as China’s faltering economic recovery continued to weigh on demand. 

Gold declined, the dollar strengthened and WTI crude fell after earlier gains. 

Key events this week:

• Eurozone CPI, Wednesday
• US housing starts, Wednesday
• China loan prime rates, Thursday
• US initial jobless claims, existing home sales, Conf. Board leading index, Thursday
• Japan CPI, Friday

Some of the main moves in markets:  

Stocks

• The S&P 500 rose 0.2% as of 4 p.m. New York time
• The Nasdaq 100 was little changed
• The Dow Jones Industrial Average rose 0.3%
• The MSCI World index rose 0.5%

Currencies

• The Bloomberg Dollar Spot Index rose 0.3%
• The euro fell 0.2% to $1.1204
• The British pound fell 0.8% to $1.2937
• The Japanese yen fell 0.6% to 139.69 per dollar

Cryptocurrencies

• Bitcoin rose 0.9% to $30,049.52
• Ether rose 0.8% to $1,910.28

Bonds

• The yield on 10-year Treasuries declined four basis points to 3.74%
• Germany’s 10-year yield advanced five basis points to 2.44%
• Britain’s 10-year yield declined 12 basis points to 4.21%

Commodities

• West Texas Intermediate crude fell 0.6% to $75.27 a barrel
• Gold futures were little changed

This story was produced with the assistance of Bloomberg Automation.

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