Saturday , September 26 2020

US stocks fluctuate as dollar, bonds advance


US stocks fluctuated and the dollar climbed versus most of its major peers after China signalled it won’t flinch in a trade war.
Major American equity averages swung between gains and losses in trading 14 percent lower than the 30-day average at this time of day. PepsiCo Inc. edged higher after chief executive officer stepped down. The Bloomberg Dollar Spot Index climbed for the fourth time in five sessions, while the pound weakened to an 11-month low on Brexit angst. US crude headed for $70 a barrel. The yield on 10-year Treasuries fell to 2.92 percent.
“There are certainly reasons for concern. The potential of a trade war leads the list,” Matt Maley, equity strategist at Miller Tabak + Co., wrote in a note to clients this morning.
“Then again, there have been reasons for concern all year. And yet, that hasn’t stopped the stock market from bouncing back strongly from its February lows.”
Rhetoric in the trade war ramped up again this weekend, with US President Donald Trump saying he has the upper hand, and Beijing responding through state media that it is ready to endure the economic fallout. The Asian country stepped in to try to cushion the yuan after a record string of weekly losses saw the currency closing in on the milestone of 7 per dollar.
Elsewhere, Turkey’s lira fell for a sixth day, while a basket of emerging market currencies held steady.
Earnings season includes results from: Japan Post Bank, Disney, 21st Century Fox, Deutsche Telekom, China Mobile, Glencore and Adidas. Tuesday brings the latest Reserve Bank of Australia meeting that is forecast to produce no change in either the record-low cash rate or the long-term guidance. The Bank of Japan releases a summary of opinions on Wednesday from its July 30-31 meeting, at which it tweaked elements of its stimulus policy to make it more sustainable. Samsung Electronics unveils its next Galaxy Note smartphone. US consumer prices probably rose in July, consistent with a pickup in inflation that’s projected to keep the Federal Reserve on a path of gradual interest-rate increases, economists forecast before Friday’s release.
The S&P 500 Index rose 0.1 percent in New York. The Stoxx Europe 600 Index dipped 0.3 percent. The MSCI All-Country World Index decreased 0.2 percent. The MSCI Emerging Market Index fell 0.2 percent.
The Bloomberg Dollar Spot Index climbed 0.2 percent to the highest in more than two weeks. The euro fell 0.2 percent to $1.154, reaching the weakest in almost 13 months on its fifth straight decline. The British pound dipped 0.5 percent to $1.2938, the weakest in about 11 months. The Japanese yen declined 0.2 percent to 111.44 per dollar.
The yield on 10-year Treasuries fell two basis points to 2.93 percent. Germany’s 10-year yield fell less than one basis point to 0.40 percent, the lowest in more than a week. Britain’s 10-year yield decreased one basis point to 1.329 percent, the lowest in more than a week.
The Bloomberg Commodity Index declined 0.1 percent. West Texas Intermediate crude climbed 1.1 percent to $69.26 a barrel, the highest in a week. LME copper dipped 1.9 percent to $6,088.50 per metric ton, the lowest in more than two weeks. Gold fell 0.5 percent to $1,209.53 an ounce.

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