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Stocks Fluctate, Treasuries Drop on Aid-Deal Bets: Markets Wrap

Todd White
·3 mins read
Stocks Fluctate, Treasuries Drop on Aid-Deal Bets: Markets Wrap
Stocks Fluctate, Treasuries Drop on Aid-Deal Bets: Markets Wrap

(Bloomberg) -- U.S. stocks erased gains to trade little changed, while Treasuries pared losses as lawmakers continued to haggle over a federal spending bill.

The S&P 500 clung to a second straight gain, with social media firms leading after Snap Inc. reported strong earnings. Twitter Inc. and Facebook Inc. jumped at least 5%. Of the 84 companies in the index that have reported, only 10 have missed analyst profit forecasts. Tesla Inc. rose ahead of financial results later Wednesday. Netflix Inc. slipped after subscribers fell short of predictions. Energy producers dropped with crude oil.

The U.S. 10-year yield broke above 0.8% to the highest since June and European yields also rose after Democratic House Speaker Nancy Pelosi expressed hope for political compromise on a bill this week.

European stocks slumped for a third day, with gold miners Fresnillo Plc and Centamin Plc falling after cutting production guidance. Telecom equipment maker Ericsson was a bright spot, climbing after a profit beat.

Pelosi said Tuesday she also hoped that fresh stimulus spending would be retroactive, although the Republican Senate majority leader has warned the White House against a bigger Democrat-led deal before the election. The administration said it hopes to get a deal in the next 48 hours and that its offer is now up to $1.88 trillion, below the $2.2 trillion Pelosi has pushed for.

“The rise in yields suggests that the market thinks a stimulus deal will be forthcoming and that the Democrats are set to take both the presidency and the Senate at the Nov. 3 election,” said John Hardy, chief foreign-exchange strategist at Saxo Bank.

Elsewhere, the yen headed for its best day versus the dollar since August. The pound jumped after European Union chief Brexit negotiator Michel Barnier said a deal is within reach. Copper traded near a two-year high on supply disruptions in Chile.

Oil dropped toward $41 a barrel in New York after an industry report pointed to a surprise increase in American crude stockpiles.

Here are some key events this week:

Brexit trade talks are likely to continue at least into next week if the U.K. and EU fail to reach an agreement.The final presidential debate before the U.S. election, between President Donald Trump and former Vice President Joe Biden, will be live from Nashville, Tennessee on Thursday.U.S. jobless claims come Thursday.

Here are some of the main market moves:

Stocks

The S&P 500 Index rose 0.3% as of 10:57 a.m. New York time.The Stoxx Europe 600 Index decreased 0.9%.The MSCI Asia Pacific Index rose 0.7%.The MSCI Emerging Market Index gained 0.3%.

Currencies

The Bloomberg Dollar Spot Index dipped 0.4% to 1,159.24.The euro increased 0.3% to $1.186.The British pound surged 1% to $1.3078.The Japanese yen strengthened 0.7% to 104.75 per dollar.

Bonds

The yield on 10-year Treasuries jumped two basis points to 0.81%.The yield on two-year Treasuries climbed one basis point to 0.15%.Germany’s 10-year yield gained one basis point to -0.59%.Britain’s 10-year yield climbed four basis points to 0.231%.

Commodities

West Texas Intermediate crude fell 3.3% to $40.33 a barrel.Gold futures strengthened 0.9% to $1,933.30 an ounce.

For more articles like this, please visit us at bloomberg.com

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©2020 Bloomberg L.P.

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