US stocks rise as trade angst ebbs; dollar falls

President Donald Trump said he doesn’t expect a breakthrough from low-level talks with China as both sides prepare to make billions of dollars in goods subject to tariffs.

Aug 21, 2018 02:08 IST India Infoline News Service

US stocks rose and the dollar slipped as investors assess the latest developments in the trade war with China.

The S&P 500 Index churned less than half a percentage point below an all-time high. President Donald Trump said he doesn’t expect a breakthrough from low-level talks with China as both sides prepare to make billions of dollars in goods subject to tariffs.

The dollar fell for the fourth day after Trump complained about the Federal Reserve’s policies. The 10-year Treasury yield rose for the first time in three days.

The effects of the trade war have rippled through markets over the last few months and could continue this week as China and the US meet on Wednesday.

The Trump administration plans to slap tariffs on $16bn of goods on the same day and China is poised to retaliate. At the same time, investors await clues on monetary policy as central bankers gather in Jackson Hole on Friday.

“For the market, it’s the idea that the US and China are talking,” Quincy Krosby, chief market strategist at Prudential Financial Inc., said by phone. “Talking is better than no talking for the market, but it still hovers over the market, there’s no doubt about that.”

Elsewhere, Turkey’s lira extended declines to the third day; the country’s markets are closed for most of this week. Futures in crude oil and industrial metals climbed, as emerging-market stocks and currencies advanced.

These are the main moves in markets:

Stocks
  • The S&P 500 Index rose 0.4 % as of 10:00 AM New York time
  • The Stoxx Europe 600 Index gained 0.5% to the highest in more than a week
  • The MSCI Emerging Market Index jumped 0.9% to the highest in more than a week
  • Germany’s DAX Index rose 0.7% to the highest in more than a week
  • The UK’s FTSE 100 Index climbed less than 0.05% to the highest in a week

Currencies
  • The Bloomberg Dollar Spot Index dipped 0.2% to the lowest in more than a week
  • The euro increased 0.2% to $1.1504, hitting the strongest in more than a week with its fifth straight advance
  • The Japanese yen fell 0.2% to 110.32 per dollar

Bonds
  • The yield on 10-year Treasuries gained three basis points to 2.85%
  • Germany’s 10-year yield gained two basis points to 0.32%, the highest in a week

Commodities
  • Gold advanced 0.1% to $1,191.28 an ounce
  • West Texas crude rose 1.8% to $67.65 per barrel
  • LME copper gained 0.9% to $6,047.00 per metric ton, the highest in more than a week

Here are some key events coming up this week:
  • Companies announcing earnings include Alibaba, Royal Bank of Canada, Lowe’s, Target, Qantas, and China’s Bank of Communications
  • Central bankers to gather at the Kansas City Fed’s annual Jackson Hole symposium, where Federal Reserve Chairman Jerome Powell speaks on Friday
  • The Fed releases the minutes from latest FOMC meeting on Wednesday
  • Eurozone preliminary PMI data for August is due on Thursday

Source: Bloomberg

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