Stocks rise, bonds slip on US-China trade optimism

Bloomberg

Stocks advanced worldwide along with US equity futures while bonds slipped on optimism China and America are moving closer to an interim trade deal. The dollar edged higher.
The Stoxx Europe 600 Index headed for a four-year high, led by miners and automakers, which jumped after US Commerce Secretary Wilbur Ross said tariffs on vehicle imports into the American market might be unnecessary. Most of Europe’s biggest equity gauges were up by more than 1%.
All major Asian markets advanced except Tokyo’s, which was shut. Contracts on the three main US equity indexes increased even as shares of MacDonald’s Corp fell in pre-market trading after the company fired its chief executive. A gauge of emerging-market stocks was set for its biggest gain in three weeks.
South Africa’s rand surged after the country clung on to its investment-grade credit rating. Treasuries fell along with most sovereign bonds in Europe. The dollar edged higher versus its biggest peers, after dipping in the previous five sessions.
Investors are trying to push up stocks for a fifth successive week, adding to the 18% gain this year notched by a global gauge of equities. Earnings continue to roll in around the world, with Uber Technologies and Marriott International expected to be announced on Monday.
In China, trade data is coming at the end of this week and will give details for October against a backdrop of easing tensions on negotiations with US counterparts.
Commerce Secretary Ross expressed optimism the US would reach a “phase one” trade deal with China this month and said licenses would be coming “very shortly” for American companies to sell components to Huawei Technologies Co President Donald Trump told reporters a trade deal, if completed, will be signed somewhere in the US.
“Everyone is kind of upbeat around the prospect of at least a partial China-US trade deal,” Peter Dragicevich, a strategist at Suncorp Corporate Services, told Bloomberg TV.
Elsewhere, crude-oil futures ticked higher. The initial public offering process for Saudi Aramco officially started, with the stock likely to start trading in Riyadh next month. Valuations vary widely.
Earnings are due from companies including: Singapore Airlines on Tuesday; SoftBank and BMW on Wednesday; Walt Disney, Toyota, Deutsche Telekom on Thursday.
US durable goods data was expected on Monday along with factory orders.
Regional Fed presidents including Charles Evans, John Williams and Patrick Harker speak at events on Wednesday.
Central bank monetary decisions are due on Tuesday in Australia and on Thursday by the Bank of England.
The Stoxx Europe 600 Index jumped 0.9% in London. Futures on the S&P 500 Index rose 0.5%. Germany’s DAX Index surged 1.2%. Hong Kong’s Hang Seng Index surged 1.6%. The MSCI Asia Pacific Index jumped 0.6%.
The Bloomberg Dollar Spot Index rose 0.1%. The euro decreased 0.1% to $1.1157. The Japanese yen fell 0.2% to 108.43 per dollar. South Africa’s rand jumped 1.4% to 14.8247 per dollar.
The yield on 10-year Treasuries rose four basis points to 1.75%. Britain’s 10-year yield rose one basis point to 0.677%. Germany’s 10-year yield climbed one basis point to -0.37%. Australia’s 10-year yield gained eight basis points to 1.18%.
Iron ore sank 2% to $80.10 per metric ton. West Texas Intermediate crude climbed 0.8%
to $56.66 a barrel.
Spot gold dropped 0.3% to $1,509 per ounce.