US stocks added to all-time highs before the start of earnings season, while the dollar got a boost from policy steps in Asia that propelled Treasury yields to the highest level in nine months.
The S&P 500 Index rose a sixth straight advance in an unblemished start to the year, the Dow Jones Industrial average resumed its march higher and the Nasdaq indexes erased early losses. European equities climbed a fifth day as unemployment in the region fell to the lowest since early 2009. China’s yuan dropped after the central bank adjusted its currency-fixing mechanism. The 10-year Treasury yield hit 2.52 percent after Bank of Japan cut purchases of long-dated bonds. The pound fell as a reshuffle of senior UK government ministers descended into chaos.
The torrid start to the year for risk assets paused with investors confident that synchronous global growth will boost earnings around the world even as central banks move to withdraw monetary support. Corporate profit reports due this week from banks including JPMorgan Chase & Co. and Wells Fargo & Co. will set the tone as traders look for more reasons to chase stocks trading at or near record highs.
Equity levels were tested in Asian trading hours when Samsung Electronics Co. missed profit forecasts and the BOJ announcement hit Japanese shares, underscoring how the rollback of central bank stimulus could affect markets. But most of the region’s major gauges still ended in the green.
US inflation data are forecast to show price pressures remain muted, giving hawks little reason to argue for faster tightening. St. Louis Fed bank President James Bullard and head of the New York Fed Bill Dudley are among central bankers scheduled to speak. China producer and consumer prices data will come on Wednesday.
The S&P 500 rose 0.3 percent to 2,756.97 as of 11:27 am in New York. Its sixth straight gain would be the longest run since October. The Dow rose 0.4 percent to 25,394 and the Nasdaq Composite rose 0.2 percent. The Stoxx Europe 600 Index increased 0.4 percent, hitting the highest in more than two years with its fifth consecutive advance. The MSCI All-Country World Index increased 0.2 percent, reaching the highest on record with its sixth consecutive advance. The MSCI Emerging Market Index fell 0.2 percent, the first retreat in more than a week and the largest decrease in two weeks.
The Bloomberg Dollar Spot Index increased 0.2 percent to the highest in more than a week. The euro fell 0.4 percent to $1.1924, the weakest in almost two weeks. The British pound declined 0.3 percent to $1.3521.