Stocks climb, bonds dive amidst Trump’s barrage of tweet

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US stocks rose, recovering most of the decline triggered by Donald Trump’s suspension of stimulus talks, after the president backed a piecemeal approach to aid and investors took a longer-term view a spending program. Treasury bills and the dollar have fallen.The S&P 500 opened higher after a barrage of late-night tweets from the president supporting hard-hit airlines US $ 25 billion and US $ 135 billion for small businesses. The benchmark fell 1.4% on Tuesday when Trump abruptly called off aid talks with the Democrats. Shares had climbed earlier in the day on signs that a deal was still possible ahead of the election.

“It is highly unlikely that House Democrats will only consider these measures – regardless, market action appears to be driven more by the prospect of a blue wave than a pre-election stimulus,” said Yousef Abbasi, Global Market Strategist at StoneX.

Investors who have seen Democratic challenger Joe Biden’s lead increase in the polls in recent days now speculate that a win from him would trigger a wave of federal spending to stimulate the economy. Tech stocks also rose early in trading, even after a House panel proposed Tuesday night for tougher antitrust rules to limit the power of Apple Inc., Alphabet Inc., Facebook Inc. and Amazon.com Inc. The four tech giants make up more than 15 percent of the S&P 500. Eli Lilly and Co. rose after advancements on its anti-COVID-19 drug.

Volatility accelerated this month after Trump contracted the coronavirus and investors were reeling from the ups and downs of the US economic aid talks. The stand-alone measures proposed by the president also included aid checks of US $ 1,200 to individuals.

“These tweets appear to have stopped the risk reduction movement,” wrote analysts including Lyn Graham-Taylor of Rabobank in London in a note to investors. “However, it seems far-fetched to think that Democrats would be in favor of signing autonomous stimulus measures. because, as the elections approach, it would erode one of the differentiators between them and Republicans.

The dollar fell slightly against a basket of its peers before Federal Reserve officials commented later Wednesday and released the minutes of their latest policy meeting. Oil fell and gold advanced.

Meanwhile, with Trump now out of hospital, investors continue to monitor the impact of the virus on the world’s economic recovery. Signs are mounting that the virus is returning to the New York City area, with infections peaking in three months.

The European Commission, meanwhile, is set to close a deal to procure more COVID-19 treatment remdesivir from Gilead Sciences Inc.

Elsewhere, shares of Gazprom PJSC fell after being fined Zloty 29 billion (US $ 7.6 billion) by the Polish antitrust watchdog, which said its plan to Nord Stream 2 pipeline would hamper competition in the energy markets of the European Union.

Satellite broadcaster Sirius XM Holdings Inc. rose to the pre-market as star Howard Stern played down reports he was trading for $ 120 million in annual salary.

Here are some key upcoming events:

  • The minutes of the September 15-16 FOMC meeting on Wednesday could be particularly fruitful for Fed watchers, starting with the details of the debate on the conditions needed to trigger a rate hike.
  • US Vice-President debate takes place in Salt Lake City on Wednesday

Here are some of the main movements in the markets:

Stocks

  • The S&P 500 Index rose 1% to 3,394.58 at 9:30 am New York time.
  • The Dow Jones Industrial Average climbed 1.1 percent to 28,068.08.
  • The Nasdaq Composite Index fell 1.6% to 11,154.60.
  • The Nasdaq 100 index fell 1.9% to 11,291.27.
  • The Stoxx Europe 600 index fell 0.2 percent to 365.07, the first decline in a week and the largest drop in more than a week.

Devises

  • The Bloomberg Dollar Spot Index fell 0.2 percent to 1,171.83.
  • The euro climbed 0.3 percent to US $ 1.1772.
  • The Japanese yen depreciated 0.3 percent to 105.93 per dollar, the weakest in nearly four weeks.

Obligations

  • The yield on 10-year Treasuries climbed four basis points to 0.78%.
  • The yield on 30-year Treasuries rose four basis points to 1.58 percent.
  • Germany’s 10-year yield gained one basis point to -0.50 percent, the highest in nearly three weeks.
  • Britain’s 10-year yield rose one basis point to 0.299 percent, the highest in more than five weeks.

Basic products

  • West Texas Intermediate crude fell 2.3 percent to US $ 39.72 per barrel.
  • Gold strengthened 0.5% to US $ 1,887.27 an ounce.
  • Copper climbed 2.4% to US $ 3.04 a pound, the highest in more than two weeks.



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