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Bloomberg
US stocks gained amid signs of a better-than-expected start to the earnings season. The pound was little changed against the dollar before a vote on the UK’s government.
The S&P 500 rose to within a whisker of its average price over the past 50 days, a level it hasn’t breached since early
December. Financials buoyed major indexes as Goldman Sachs and Bank of America surged following quarterly reports. Apple advanced to its highest level since the start of the year, while payment processor Fiserv tumbled after announcing it will acquire First Data Corp for $22 billion.
In Europe, Deutsche Bank gained after regulators were said to favour a merger with a European lender. UK stocks retreated and the nation’s bonds fell as PM Theresa May’s government faced a no-confidence vote, which if successful would force an election. West Texas crude traded around $52 a barrel.
“For the financials and really the market as a whole, where we are is really sort of a classic case where growth is slowing, global growth is slowing, the outlook is worse and the
markets run way way ahead and priced in something a lot worse,†Binky Chadha, Deutsche Bank chief US equity and global strategist, said on Bloomberg Television.
The mood in equity markets remains fairly buoyant after China pledged to step up efforts to support growth and ECB President Mario Draghi said the euro area will avoid a recession even though recent data signalled softening momentum.
Still, there are plenty of worries to give investors pause before taking this month’s rally further. The political impasse in Washington continues to leave swathes of the federal US government shuttered, and the UK’s Brexit drama threatens to impair business confidence in the second-largest European economy. A confidence motion vote was expected to take place on Wednesday in London as the opposition Labour Party tries to force a general election.
The S&P 500 Index climbed 0.4 percent, as of in New York. The Stoxx Europe 600 Index increased 0.5 percent, the highest in five weeks. The UK’s FTSE 100 Index sank 0.5 percent. The MSCI Emerging Market Index rose 0.4 percent.
The Bloomberg Dollar Spot Index climbed 0.1 percent to the highest. The euro dipped 0.1 percent to $1.1402. The British pound was little changed at to $1.2863. The Japanese yen fell 0.2 percent to 108.89 per dollar.
The yield on 10-year Treasuries climbed two basis points to 2.73 percent.