US stocks rally despite Irma threat

Bloomberg

US stocks opened higher on Wednesday, even as North Korean tensions continued to simmer, another hurricane tore through the Caribbean and the American debt ceiling loomed.
The S&P 500 Index resumed its rally after a one-day setback and US Treasuries edged lower following dovish comments from Federal Reserve officials sparked a surge. West Texas Intermediate crude traded above $49 a barrel for the first time in a month.
European stocks followed Asian peers lower before erasing the drop, the dollar swung and oil jumped. Automakers helped spur a recovery for the Stoxx Europe 600 Index after equities slid from Hong Kong to Sydney as traders girded for a potential intercontinental ballistic missile launch by Pyongyang. The euro shrugged off an unexpected decline in German factory orders to rise for a third day.
The case for a continued risk-
off tone was supported by a lack
of consensus among the US, Russia and China on how to pressure
Kim Jong Un to abandon his
nuclear ambitions. Russian President Vladimir Putin rejected
US calls for more sanctions, echoing China’s resistance to more punitive measures.
For traders looking past North Korea, there’s a raft of central bankers and economic decisions and data still on the schedule this week. Chief among them is Mario Draghi, who may give more clarity on winding down the European Central Bank’s bond-buying program when he speaks after a policy decision on Thursday. US unemployment claims and the release of the Fed’s Beige Book are also on the way. Federal Reserve speakers so far have continued to urge caution on tightening policy.
While Hurricane Irma threatens Florida and the cleanup from Harvey continues, US President Donald Trump is scheduled to appear at a tax reform event in North Dakota. He’s expected to focus on the state’s history of cross-party support for reductions to the tax rate, according to speech excerpts provided by the White House
The hurricanes could “help the children get along in the sandbox because the country is going to have to work together on relief and other things could get done that could stimulate the economy,” said Brian Belski, chief investment strategist at BMO Capital Markets. North Korea remains the biggest threat because it’s a “very binary” situation that markets are “un-able to discount,” he said. Elsewhere, data showed Australia’s economy grew less than forecast in the second quarter, and the Reserve Bank of Australia left its benchmark rate unchanged.
Today’s Canadian rate decision is dividing forecasters as the economy has grown faster than predicted. China trade figures this week are anticipated to show another month of solid export growth, while FX reserves probably continued to rise on stricter capital controls, robust growth and a stronger yuan, according to Bloomberg Intelligence. The European Central Bank meets on Thursday. Mario Draghi will express concern over the euro’s strength, but won’t say much about his asset-purchase program’s
future, according to a survey.
The S&P 500 Index rose 0.26 percent to 2,464.19 as of 9:36 a.m. New York time The Stoxx Europe 600 Index increased 0.1 percent. Germany’s DAX Index increased 1 percent to the highest in three weeks. The UK’s FTSE 100 Index fell 0.4 percent to the lowest in more than a week.
The Bloomberg Dollar Spot Index increased less than 0.05 percent, its first advance in a week. The euro climbed 0.1 percent to $1.1931. The British pound advanced 0.2 percent to $1.3054. The Japanese yen declined 0.1 percent to 108.90 per dollar. The yield on 10-year Treasuries advanced one basis point to 2.07 percent. Germany’s 10-year yield increased less than one basis point to 0.34 percent. Britain’s 10-year yield fell two basis points to 1.011 percent, the lowest in more than a week.
Gold dipped less than 0.05 percent to $1,339.63 an ounce, the first retreat in a week. West Texas Intermediate crude advanced 1 percent to $49.14 a barrel, the highest in four weeks. The Bloomberg Commodity Index gained 0.2 percent to 85.57, the highest in more than 20 weeks.