Tech leads stock rebound; Treasuries decline, oil soars

Bloomberg

Beaten-down tech shares led the rebound in US stocks, while Treasuries fell as investors gained confidence from positive political developments in Europe and rising oil prices.
The S&P 500 Index rallied back from its worst week in a month amid signs of progress in two standoffs that have continually rattled markets — Italy’s fiscal woes and Brexit. The 10-year Treasury yield rose ahead of a slew of Federal Reserve speakers this week, including chair Jerome Powell, and the release of Fed meeting minutes. The dollar edged lower after its biggest weekly gain in more than a month, while West Texas crude rallied above $51 a barrel following a more than 7 percent slide on Friday.
Amazon jumped more than 2 percent as most members of the FAANG cohort added at least
1 percent. Retailers Tiffany & Co. and Best Buy Co. surged on a strong start to holiday shopping. CVS Health rallied after it won the New York regulator’s approval for its Aetna deal.
Italy’s bonds jumped as state officials began studying scenarios for a lower 2019 budget deficit target. The pound gained after European Union leaders signed off over the weekend on the proposed Brexit plan. Bitcoin extended its recent tumble to below $4,000 as cryptocurrencies fell across the board.
Investors will scour this week’s Fed speech and policy minutes for clues on the future of rates. After stock markets skidded last week, and with bond traders reducing expectations for the pace of US monetary policy tightening, Fed Chairman Jerome Powell has the opportunity to shed light on prospects for a pause in a speech on Wednesday. The sit-down between Presidents Xi Jinping and Donald Trump has heightened hopes of a resolution to the trade war ahead of the next escalation of tariffs.
“If the Federal Reserve was genuinely worried that the fall in equity markets could cause significant balance-sheet problems, say in the US corporate side, then it could easily step back,” Berenberg Senior Economist Kallum Pickering said.
European Central Bank President Mario Draghi was expected to address the European Parliament’s committee for economic and monetary affairs on Monday. Presidents Donald Trump and Xi Jinping plan to meet at the G-20 summit in Argentina that kicks off on Friday. Federal Reserve Vice Chairman Richard Clarida speaks in
New York on Tuesday and Chairman Jerome Powell addresses the New York Economic Club on Wednesday.
The Stoxx Europe 600 Index gained 0.8 percent in New York, the highest in more than a week. Futures on the S&P 500 Index gained 1.1 percent to the highest in a week on the biggest rise in more than a week. Italy’s FTSE MIB Index jumped 2.5 percent to the highest in almost two weeks on the largest surge in more than five months.
The UK’s FTSE 100 Index increased 0.6 percent. The MSCI All-Country World Index climbed 0.3 percent.
The yield on 10-year Treasuries gained two basis points to 3.06 percent, the biggest climb in almost three weeks.