US stocks climbed to record highs as Wal-Mart Stores Inc. led a rally in consumer shares and energy producers climbed along with oil prices. Politics remained the dominant theme in Europe as Spanish stocks declined and the euro rose before a pivotal meeting of Catalan’s regional parliament.
The dollar had weakened against most major currencies as President Donald Trump’s feud with Senator Bob Corker clouded the outlook for his much-heralded tax reform. Traders are also waiting for minutes from the Federal Reserve’s last meeting, which may provide more details on the path of interest rates and balance sheet tapering. The S&P 500 Index, Dow Jones Industrial Average and Nasdaq Composite Index all set record highs.
“Everybody is looking at earnings and we’re anticipating a good earnings season,” Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago said.
“We’re anticipating some tax legislation and the dollar has picked up here a little bit too.”
Catalan lawmakers were expected to meet on Tuesday to consider a declaration of independence that risks an ironclad backlash from Madrid. Spanish police are ready to arrest Catalan President Carles Puigdemont immediately if he declares independence in the regional parliament, according to people familiar with the matter. The IBEX fell, leading declines amid mixed national benchmarks. The common currency gained for a third day and bond yields across Europe edged higher. “Signs of disagreement are starting to emerge within the regional government, with more moderate members fearing the consequences of a further step towards independence, given the lack of support from the EU, and moves by some banks and firms to leave Catalonia,” said Fabio Balboni, an economist at HSBC Bank Plc.
In the UK, sterling continued to recover from last week’s drop after UK Prime Minister Theresa May won public support from Brexit hardliners in her cabinet for outlining contingency plans for leaving the European Union without a deal. The pound was also boosted by a fourth straight month of gains in UK like-for-like retail sales, and manufacturing and construction data that beat forecasts.
Elsewhere, Turkey’s lira recouped some of yesterdays losses even as the US signalled the crisis between the two countries could drag on. Gold gained as the greenback weakened, and West Texas oil rose above $50 a barrel before US government data forecast to show crude inventories extended declines for a third week. Japan’s Topix index closed at the highest since July 2007 and Korean stocks staged a catch-up rally after a week-long holiday.
Minutes from the most recent Federal Reserve meeting are due on Wednesday. API and EIA crude data are delayed to Wednesday and Thursday, respectively, because of Monday’s US holiday. The International Monetary Fund and World Bank hold their annual fall meetings this week. Earnings season begins for major US banks, led by JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp. and Wells Fargo & Co. Also reporting will be BlackRock Inc., Domino’s Pizza Inc., Samsung Electronics Co., German container company Gerresheimer AG, UK grocery wholesaler Booker Group Plc, and Sky Plc. The active Atlantic hurricane season will probably figure prominently in US data on retail sales and consumer prices.
The S&P 500 Index rose 0.2 percent to 2,548.94 at 10:14 a.m. in New York, after climbing to a record 2,555.23. The Stoxx Europe 600 Index was little changed. The MSCI All-Country World Index rose 0.4 percent. Spain’s IBEX Index fell 1.1 percent. The MSCI Emerging Market Index rose 1 percent.
The Bloomberg Dollar Spot Index fell 0.5 percent. The euro climbed 0.6 percent to $1.1808. The Turkish lira gained 0.9 percent.