Stocks rise as US, China seek to avoid trade war

Bloomberg

US stocks climbed as industrial shares rallied after Bloomberg reported that the Trump administration is seeking to ease trade tensions with China. Most sovereign bond yields edged lower after the Bank of Japan pledged to keep its monetary policy ultra loose.
The S&P 500 Index halted a three-day slide as Boeing Co, Caterpillar Inc and 3M Co all added more than 1 percent. Tech shares were slightly higher as investors awaited Apple Inc’s earnings results following a rout for the sector. The Stoxx Europe 600 Index also advanced as earnings from BP Plc and Credit Suisse Group AG beat forecasts. Japanese bond yields fell the most since November after the BOJ signalled interest rates will stay low for an “extended period of time.”
The report of efforts by the US and China to come to an agreement provided relief to investors who have seen the dispute stalled for weeks, with both sides refusing to budge. The next wave of US tariffs is set to kick in as early as Wednesday, with the possible imposition of duties on another $16 billion of Chinese imports. Officials in Beijing have vowed to respond with the same amount of tariffs on US products.
“Where these talks go, we’ll have to see,” Peter Boockvar, the chief investment officer of Bleakley Financial Group, wrote in an email. “But at least they will be talking.”
Amid a slew of earnings reports, central banks remain a key focus for investors. The BOJ delivered a range of adjustments designed to alleviate strains on commercial banks and reduce market distortions from its policies, while simultaneously maintaining its commitment to open-ended stimulus. The next big events this week include decisions from both the Federal Reserve and Bank of England.
Elsewhere, the dollar edged higher as US consumer spending posted a fourth-straight solid advance in June. Commodities clawed back earlier losses made after China’s official factory gauge dropped in July. Oil fell and emerging-market shares slipped.
The US Treasury is set to release its funding program for the next three months on August 1. Earnings season continues with Berkshire Hathaway, Barclays, Tesla, Toyota, BMW, and Rio Tinto among companies reporting results. Central banks in the US, the UK, Brazil and India all meet this week. The Bank of England is expected to hike even amid Brexit gloom. The Fed is seen standing pat, as is Brazil’s central bank. The RBI will probably raise its benchmark. The US jobs report is on Friday, and is predicted to show a healthy labor market, with 193,000 new jobs, and an unemployment rate slipping back to 3.9 percent.
STOCKS
The S&P 500 Index climbed 0.4 percent in New York. The Stoxx Europe 600 Index gained 0.3 percent. The MSCI Emerging Market Index fell 0.2 percent. Japan’s Topix index declined 0.8 percent for the biggest drop in almost four weeks.

CURRENCIES
The Bloomberg Dollar Spot Index rose 0.2 percent. The euro rose 0.1 percent to $1.1716. The British pound was little changed at $1.3127. The Japanese yen fell 0.7 percent to 111.82 per dollar, the weakest in more than a week.

BONDS
The yield on 10-year Treasuries fell two basis points to 2.95 percent. Germany’s 10-year yield was little changed at 0.44 percent. Britain’s 10-year yield fell one basis point to 1.33 percent. Japan’s 10-year yield dipped four basis points to 0.062 percent.