Oil gains, dollar pushes higher as earnings boost US stocks

Bloomberg

The dollar strengthened and Treasury yields rose after traders added to bets on higher US interest rates, while the S&P 500 Index climbed towards a fresh record.
US equities were bolstered by IBM’s forecast for its first sales growth in five years and better-than-estimated earnings at Abbott Laboratories. Oil gained amid signs of declining US stockpiles. The Stoxx Europe 600 Index advanced on wagers the European Central Bank will remain accommodative even as it tapers asset purchases. The greenback’s advance over the past three days helped send volatility in major currencies to a three-month low.
Fed funds futures indicate a roughly 80 percent chance that US policy makers will raise rates at their December meeting, up from 72 percent. President Donald Trump’s choice for the next Fed chair will be unveiled before he leaves on November 3 for an 11-day trip to Asia and Hawaii, a person familiar with the process said Tuesday. John Taylor was said to have impressed Trump in an interview, buoying gains in the greenback earlier this week given the assumption by many that he would favor tighter policy.
Spanish stocks underperformed as a Thursday deadline on Catalonia’s independence looms. The Catalan standoff is one of several political risks facing investors in Europe, including high-stakes coalition talks that began Wednesday in Germany between Angela Merkel’s Christian Democrats and potential partners to lead Europe’s biggest economy.
The pound extended a decline amid more headwinds for Brexit negotiations. Stocks in Shanghai gained after Chinese President Xi Jinping laid out a road map to turn the country into a leading global power by 2050. Investors are watching to see whether Xi will push through tough reforms as the world’s second-largest economy faces structural challenges over the next five years.
New York Fed President Bill Dudley and Dallas Fed President Robert Kaplan are set to speak on Wednesday. China releases data for GDP, industrial production and retail sales on Thursday. Markets in Malaysia, Singapore and Sri Lanka were closed on Wednesday for holidays. The S&P 500 Index rose 0.2 percent as of 9:32 am in New York. The Stoxx Europe 600 Index climbed 0.4 percent. The UK’s FTSE 100 Index gained 0.5 percent. Germany’s DAX Index increased 0.6 percent to the highest on record.
The Bloomberg Dollar Spot Index climbed 0.2 percent to the highest in more than a week. The euro was little changed at $1.1766. The British pound dipped 0.2 percent to $1.3162. The Japanese yen sank 0.6 percent to 112.89 per dollar.
The yield on 10-year Treasuries jumped four basis points to 2.34 percent, the highest in a week. Germany’s 10-year yield jumped three basis points to 0.39 percent. Britain’s 10-year yield jumped four basis points to 1.31 percent.
Japan’s Topix index closed less than 0.1 percent higher in Tokyo. Australia’s S&P/ASX 500 Index ended flat, while South Korea’s Kospi index edged lower. Hong Kong’s Hang Seng Index closed little changed. Shanghai Composite Index was up 0.3 percent.