US stocks trade near all-time highs, Treasury yields climb

Bloomberg

US stocks churned near all-time highs, while Treasury yields climbed as investors assessed the latest developments from the Trump administration’s trade policies.
The S&P 500 clung to a record after opening above 2,900 for the first time. Rate-sensitive shares retreated as the 10-year Treasury yield moved towards 2.90 percent. The Mexican peso failed to hold onto Monday’s gains as investors clamored for details and clarity on where a new trade agreement with the US leaves Canada.
Carmakers and miners were the biggest winners in the Stoxx Europe 600 Index. Equities in Japan rose while those in China slipped. The yuan climbed after the country’s central bank strengthened the daily fixing against the greenback by the most in more than 14 months.
Optimism around the US-Mexico deal is helping shift the news agenda in markets in the wake of Trump’s legal woes, while the Federal Reserve’s outlook has also boosted sentiment. Gains for risk assets remain fragile, however, as hopes for a similar trade breakthrough between America and China fade and a host of threats remain, from US relations with Russia and North Korea to Chinese growth prospects.
“On a broad sense, if markets were worried about trade tensions and trade talks escalating into full-blown wars at least this is one sign that there is a cooling off period and that some parts of the global trade space will still be connected and as free markets would hope,” said Nandini Ramakrishnan, global market strategist at JPMorgan Asset Management. “Another good example: European discussions this summer came down to a very conciliatory, almost non-issue.”
Elsewhere, Turkey’s lira fell and Brent crude oil edged up to almost $77 a barrel. Bitcoin climbed for the fourth successive weekday, breaking above both $7,000 and its 50-day moving average.
Earnings are due from companies including Canada’s largest banks and China Construction Bank Corp., Pernod Ricard and Dollar General. China’s official factory PMI are due on Friday. The US economy probably grew in the second quarter at a slightly slower pace, economists predict ahead of Wednesday’s report. The Bank of Korea sets policy on Friday. Weak jobs growth has cooled speculation of an interest-rate increase.
The S&P 500 was virtually flat at 2,896.23 in New York. The Stoxx Europe 600 Index gained 0.1 percent to the highest in almost three weeks. The MSCI Emerging Market Index advanced 0.2 percent. The MSCI Asia Pacific Index climbed 0.4 percent to the highest in almost three weeks.
The yield on 10-year Treasuries gained one basis point to 2.85 percent, the highest in more than a week. Britain’s 10-year yield advanced 17 basis points to 1.451 percent, the highest in 14 weeks on the biggest rise in five years.