Stocks edge higher before slew of central banks’ rate decisions

BLOOMBERG

Stocks inched higher as traders prepared for a week packed with interest-rate decisions from major central banks. Tesla Inc. was poised to set a record winning streak.
Modest gains in US futures signaled a further advance into bull-market territory for the S&P 500 as bets on a Federal Reserve pause after 10 straight rate hikes buoyed contracts for the tech-heavy Nasdaq 100. Tesla is on course for a 12th day of gains as its electric-car chargers become the industry standard.
Consumer-products shares led the advance in Europe, where Adidas AG rallied after analysts at Bernstein upgraded the German sportswear maker.
A busy calendar for investors kicks off with the US consumer price data on Tuesday and the Fed’s latest policy decision the next day. With the pace of inflation still proving sticky, positioning in rates markets suggests one more hike in July.
“It feels like markets have been underpricing the probability of a June hike,” said Pooja Kumra, senior European rates strategist at Toronto Dominion Bank. “Data is moving in the right direction, but still not where central banks would like inflation to be.”
Energy stocks were the biggest laggards in European trading as oil extended losses amid persistent concerns around the demand outlook, with Goldman Sachs Group  cutting its price forecast again. Shell Plc and BP Plc both slipped more than 1%. Miners were also weaker after iron ore slumped almost 5%, falling for the first time in nine sessions because of worries about weakness in China’s property industry.
A Bloomberg measure of the dollar ticked lower in the relatively risk-on mood. Treasury yields were steady. While the consensus is for the Fed to pause this week, unexpected hikes from the Bank of Canada and the Reserve Bank of Australia have added an extra element of uncertainty to markets. The European Central Bank is projected to lift its benchmark rate on Thursday and the Bank of Japan is expected to stand pat on Friday.
Add to that the concerns over growth in China. The People’s Bank of China will have an opportunity to add more monetary stimulus on Thursday, although the majority of economists surveyed by Bloomberg predict no change to ratesyet.
Meanwhile in stocks, Wall Street’s top strategists are giving divergent views on what the S&P 500 will likely do next. Goldman Sachs strategists expect the gains to continue as other sectors catch up with the searing rally for technology shares. Morgan Stanley’s Michael Wilson, meanwhile, points instead to the example of the bear market of the 1940s, when the S&P 500 rallied 24% before returning to a new low.
Elsewhere, in emerging markets, Turkish stocks surged to record highs, while the lira traded near all-time lows, as the appointment of two former Wall Street bankers to the country’s new economy team offered hopes.
Nigerian international debt surged after the surprise ouster of the central bank governor, with investors wagering that his removal will allow President Bola Tinubu to better pursue his pledge to shake up monetary policy settings blamed for holding back Africa’s biggest economy.