Oil Extends Gain as Stocks Struggle; Pound Climbs: Markets Wrap

U.S. stocks added to records and the dollar held gains while Treasuries fell for a second day as the Trump administration plotted strategy for pushing a tax overhaul.

The S&P 500, Dow Jones Industrial Average and Nasdaq Composite indexes all closed at unprecedented highs. Apple Inc. slipped, as did some of its biggest suppliers, after investors were underwhelmed at the unveiling of the company’s latest gadgets. The pound jumped as U.K. inflation accelerated more than forecast, and oil rose as producers were said to discuss extending output cuts.

Demand for riskier assets prevailed Tuesday after North Korea refrained from provocations following the UN Security Council’s move to impose sanctions and as the threat from Hurricane Irma receded. President Donald Trump was said to be planning an aggressive travel schedule to sell the idea of a tax overhaul that he promises will bolster growth.

“There is no question that the stock market has an expectation that we are going to get tax reform done,” Treasury Secretary Steven Mnuchin said at a New York conference. “The stock market has expectations that we are going to create significant growth. Which is what this president and this administration is focused on.”

BAML's Subramanian Sees Late-Stage Bull Market Signs

Savita Subramanian, head of U.S. equity and quantitative strategy at BofAML, discusses the bull market.

Source: Bloomberg

Anticipation surrounding the new iPhone boosted stocks of some European semiconductor makers on speculation they may get a share of the component-manufacturing pie. Apple fell 0.4 percent, and suppliers including Skyworks Solutions Inc., Broadcom Ltd., Cirrus Logic Inc. and Analog Devices Inc. also dropped less than 1 percent. The U.S. company unveiled a new watch that can make calls on its own, an updated version of its Apple TV set-top box, and a top-of-the-line phone that uses facial recognition to unlock it.

Terminal subscribers can read more on our Markets Live blog.

Among the key events this week for markets:

  • U.S. retail sales and inflation data are due this week.
  • The U.K. reports wage data Wednesday. The Bank of England will almost certainly leave policy unchanged Thursday.
  • Also due this week are data on China’s August industrial production, retail sales and fixed-asset investment.
  • Australia releases jobs data on Thursday.
  • And the Frankfurt Motor Show is still underway.

Here are the main moves in markets:

Stocks

  • The S&P 500 Index rose 0.3 percent to 2,496.49 at the close in New York.
  • The Stoxx Europe 600 Index rose 0.5 percent, hitting the highest in five weeks
  • The MSCI All-Country World Index gained 0.3 percent to the highest on record.
  • The MSCI Emerging Market Index climbed 0.2 percent.

Currencies

  • The Bloomberg Dollar Spot Index gained 0.1 percent.
  • The euro rose 0.1 percent to $1.1965.
  • The British pound advanced 0.9 percent to $1.3284, the strongest in a year
  • The Japanese yen fell 0.7 percent to 110.18 per dollar, the weakest since Sept. 1.

Bonds

  • The yield on 10-year Treasuries increased four basis points to 2.17 percent, the highest in two weeks.
  • Germany’s 10-year yield rose six basis points to 0.4 percent, the highest in three weeks.
  • Britain’s 10-year yield climbed nine basis points to 1.13 percent, the highest in about a month.

Commodities

  • Gold bullion futures fell 1.1 percent to settle at $1,335.70 an ounce.
  • West Texas Intermediate crude gained 0.3 percent to settle at $48.23 a barrel
  • Copper dropped to the lowest in almost three weeks

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