Stocks advance on upbeat economic data; bonds dip

Bloomberg

US stocks advanced and bonds retreated globally as upbeat economic reports from China to Europe and renewed hopes for a Sino-US trade deal attracted investors to riskier assets. The euro and pound strengthened.
The S&P 500 climbed for a fifth day, equaling the longest winning streak in two months. The Dow briefly erased gains after a gauge of US service industries fell in March by more than expected. The Stoxx Europe 600 index jumped after a string of economic reports from Italy to Germany eased concern over the euro area’s growth outlook. The US and China are making “good headway” in trade negotiations but unready to reach a deal and hope to get closer this week, President Trump’s top economic adviser Larry Kudlow told reporters.
“The last couple of days have been pretty impressive in terms of the upside and certain breakouts in stocks and the markets,” Louise Yamada, managing director of Louise Yamada Technical Research Advisors, said in an interview.
In the UK, the pound advanced after Prime Minister Theresa May announced a cross-party approach to break the logjam over Brexit. Treasuries fell with sovereign bonds in Europe, where the key German 10-year yield climbed back above zero for the first time in a week.
Investors are looking for fresh catalysts to sustain an equities rally that so far has weathered underwhelming global-growth data. Topping their agenda are signs of a rebound in China’s economy, the trade war possibly ending and moves towards a softer Brexit. Chinese Vice Premier Liu He is set to resume trade talks in Washington, while UK opposition Labour leader Jeremy Corbyn welcomed May’s steps to compromise on a new Brexit strategy.
“Trade matters because it could impact corporate earnings,” said Alec Young, managing director of global markets research for FTSE Russell.
“As a result, the biggest thing investors will be looking for is a full rollback of all existing tariffs plus commitments not to initiate new tariffs in the future.”
Elsewhere, oil hovered near a four-month high in New York. MSCI’s gauge of emerging-market stocks climbed to an eight-month high. The Bloomberg Commodities Index climbed for a third day as iron ore bounded higher on concern over supplies from Brazil.
The monthly US jobs report on Friday is projected to show non-farm payrolls up 180,000 in March, similar to the 186,000 average over the prior three months, after recent readings whipsawed analysts. India’s central bank will set policy on Thursday.
The S&P 500 Index rose 0.4 percent in New York, while the Nasdaq Composite Index gained 0.8 percent and the Dow Jones Industrial Average rose 0.1 percent. The Stoxx Europe 600 climbed 0.7 percent, the fourth consecutive rise. The MSCI Emerging Market Index climbed 0.9 percent the fifth straight increase.
The MSCI Asia Pacific Index rose 0.8 percent, the fourth consecutive gain.
The Bloomberg Dollar Spot Index fell 0.2 percent. The euro gained 0.3 percent to $1.1235, while the yen weakened 0.1 percent to 111.48 per dollar. The British pound strengthened 0.3 percent to $1.3162, the third straight increase.
The MSCI Emerging Markets Currency Index increased 0.3 percent.
The yield on 10-year Treasuries rose four basis points to 2.52 percent. Germany’s 10-year yield increased six basis points to 0.01 percent.
Britain’s 10-year yield jumped eight basis points to 1.08 percent.