Sunday , July 5 2020

US stocks struggle to hold gains amid focus on trade


US stocks struggled to hold onto a sixth straight gain as investors weighed the outlook for trade talks and interest rate policy. Treasuries were steady and the dollar edged higher.
The S&P 500 Index erased most of its advance near midday as gains in tech hardware makers were offset by losses for industrial companies. Mining and automobile shares pulled the Stoxx Europe 600 Index higher. Some of the optimism generated by US President Donald Trump’s deal to avoid tariffs on imports from Mexico was tempered by a new threat to raise duties again on China if President Xi Jinping doesn’t meet with him at the Group of 20 summit this month.
Sentiment is still cautious among stock investors after a horrific month of May for global equity markets, with investors looking to the G-20 summit in Japan as the next possible site for a breakthrough in the trade dispute between the world’s two largest economies.
As traders have added bets on lower US interest rates, Trump stepped up his criticism of Fed policy in a tweet on Tuesday, calling borrowing costs “way too high” amid “VERY LOW INFLATION.”
“We are going to continue to be range-bound,” Joe “JJ” Kinahan, the chief market strategist at TD Ameritrade, said in an interview at Bloomberg’s New York headquarters.
“There’s the fear of missing out in case the tariffs situation with China is completely settled, so people don’t want to necessarily sell. Now we’re at the top of the range, and I think we’re going to see people who are hesitant to continue to buy.”
Elsewhere, Mexico’s peso stabilised after posting its best day in almost a year following the country’s accord with the US. The onshore yuan recovered after closing at its weakest level of the year.
Emerging-market stocks and currencies both gained. Oil climbed towards $54 a barrel in New York.
The US releases consumer prices for May on Wednesday. ECB President Mario Draghi speaks at a conference in Frankfurt on Wednesday. The race to succeed Theresa May heats up with the first Conservative Party leadership ballot on Thursday. Euro-area finance ministers meet in Luxembourg on Thursday. On the agenda:
financial penalties for Italy over its debt load, and the euro-area budget. China and the US
release industrial production,
retail sales data on Friday.
The S&P 500 Index was little changed in New York. The Stoxx Europe 600 Index increased 0.7 percent, in the sixth gain in seven sessions. The Shanghai Composite Index jumped 2.6 percent on the biggest surge in more than a month. The MSCI Emerging Markets Index climbed 0.9 percent to the highest in more than a month.
The Bloomberg Dollar Spot Index increased 0.1 percent. The Japanese yen decreased
0.2 percent to 108.66 per dollar. The onshore yuan climbed 0.3 percent, the biggest increase in almost eight weeks. The MSCI Emerging Markets Currency Index gained 0.3 percent.
The yield on 10-year Treasuries was little changed at
2.15 percent. Germany’s 10-year yield fell to -0.23 percent. The UK’s 10-year yield rose one basis point to 0.84 percent.
Gold fell 0.2 percent to $1,325.77 an ounce. West Texas Intermediate crude climbed
0.2 percent to $53.38 a barrel.

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