US stocks rise with dollar before Fed minutes; Treasuries decline

Bloomberg

US stocks rose for the seventh time in eight days and the dollar’s rally reached a fourth day as strong corporate results bolstered optimism in the economy. Treasuries edged lower as investors await Federal Reserve meeting minutes.
The S&P 500 Index jumped as industrial and financial shares paced gains. The index still sits 4.8 percent below its January 26 record. Tech shares lifted the Nasdaq 100 Index to a three-week high. The greenback advanced versus major peers and 10-year Treasury yields held near 2.90 percent. The two-year rate pushed past 2.25 percent to a nine-year high before another round of US debt sales.
European equities rose even after data showed a fading outlook for manufacturing and services in the region. Sterling slumped following a rise in unemployment. Stocks climbed in Hong Kong, cementing a rebound from one of the worst routs in years at the start of February.
The US Treasury’s $258 billion of auctions slated for this week comes amid surging rates that gave impetus to one of the steepest equity selloffs in years two weeks ago. While investors seem to have adjusted to 10-year yields at a four-year high for now, the deluge of fresh debt could push them higher, weakening the case for owning stocks at elevated valuations.
“What we’re going to see in these minutes is the mindset of the Fed before everything changed,” Jonathan Lewis, chief investment officer at Fiera Capital, said. “To the extent that they hint at any concern that’s greater than in the past about wages and inflation, that would be a source of concern to the markets. That might lead people to think that they’ll be hawkish and will hike at a faster rate.”
Elsewhere, the rand jumped as traders took South Africa’s budget positively. Oil in New York dropped ahead of US government data that’s forecast to show crude inventories gained for a fourth week. Bitcoin fell below $11,000.
The Fed will release minutes of its January 30-31 meeting, Janet Yellen’s last as chair, where officials kept the rate unchanged. ECB minutes come a day later. Fed policy makers speaking this week include New York Fed President William Dudley and Atlanta Fed President Raphael Bostic. Cleveland Fed President Loretta Mester is among speakers at the US Monetary Policy Forum in New York City. Companies announcing earnings this week include Woolworths, Barclays and Royal Bank of Scotland. Shanghai’s market reopens on Thursday after holidays.
The S&P 500 climbed 0.7 percent at 11:43 am in New York. The Nasdaq 100 added 1 percernt. The Stoxx Europe 600 Index erased losses to close higher by 0.2 percent. The MSCI Asia Pacific Index gained 0.3 percent. The MSCI Emerging Market Index jumped 1.5 percent to the highest in more than two weeks.
The Bloomberg Dollar Spot Index gained 0.2 percent. The euro dipped 0.2 percent to $1.2308. The British pound declined 0.4 percent to $1.3938. The Japanese yen decreased 0.3 percent to 107.701 per dollar. South Africa’s rand jumped 0.7 percent to 11.654 per dollar. The MSCI Emerging Markets Currency Index advanced 0.1 percent.