Wednesday , December 11 2019

US equity futures rise; dollar gains with Treasury yields

Bloomberg

US equity futures edged up while stocks climbed globally as the risk-on mood that’s driven American benchmarks to record highs showed few signs of abating.
The dollar gained and Treasury yields rose after data on economic growth and claims for unemployment beat analysts’ expectations.
Contracts on the S&P 500 trimmed some of its advance as farm-equipment maker Deere & Co fell in pre-market trading after income guidance missed estimates. Futures on the Dow Jones Industrial Average and Nasdaq Composite all ticked higher after the underlying indexes all closed at record highs. The Stoxx Europe 600 benchmark rose to within 1% of its record close, with 15 of 19 sector groups advancing.
Equities climbed across Asia except in China, where data showed the economy slowing further, as investors continue to monitor developments on trade. President Donald Trump declared that talks on the first phase of a deal were nearly done after negotiators from both sides spoke by telephone.
Treasuries were little changed on the last day before trading is halted for the nation’s Thanksgiving holiday.
Investors are searching among trade developments and the final earnings-season reports for reasons to stay positive on stocks, and as a global benchmark of developing and emerging-market equities hovers just below its all-time record. They’re also waiting for evidence that Trump’s optimism on trade will be translated into an agreement.
“Trump suggesting that negotiations are near completion have buoyed the idea that a deal could be struck before year end, all of which is feeding the uptick in investor sentiment and subsequent risk appetite,” Simon Ballard, a macro strategist at First Abu Dhabi Bank, wrote in a note. “But we have traded up on such optimism before, only to then be let down.”
Pressure on China is building from several sides. Trade talks are being complicated by US support for pro-democracy demonstrators in Hong Kong, and data shows continued economic weakness. Profits at Chinese industrial firms fell the most on record in October, dropping 9.9% from a year ago.
Elsewhere, a benchmark stock index in Australia ended the day close to a record high after the country’s central bank laid out a road map for interest-rate cuts and quantitative easing. Oil held two days of gains, as optimism that a limited trade deal is getting closer offset an industry report showing an increase in US crude stockpiles. Bitcoin gyrated around $7,000 after 10 successive sessions of declines.
US consumer spending data was expected to be released on Wednesday, along with GDP, personal spending, jobless claims and durable goods.
The US celebrates Thanksgiving on Thursday, when equity and bond markets will be shut. Euro area inflation for October is due on Friday. The Bank of Korea sets policy on Friday.
The Stoxx Europe 600 Index advanced 0.3% in New York. Futures on the S&P 500 Index increased 0.1%. The UK’s FTSE 100 Index moved 0.5% higher. The MSCI Asia Pacific Index climbed 0.3%. The MSCI All-Country World Index gained 0.1%.
The Bloomberg Dollar Spot Index increased 0.1%. The British pound advanced 0.1% to $1.2878. The euro decreased 0.1% to $1.1005. The Japanese yen declined 0.1% to 109.13 per dollar. Bitcoin increased 2.2% to $7,273.
The yield on 10-year Treasuries increased less than one basis point to 1.74%.
West Texas Intermediate crude advanced 0.3% to $58.58 a barrel.

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