Stocks fluctuate ahead of earnings, as U.S. dollar rises
U.S. equities swung between gains and losses as investors downplayed an overnight rally in Asian equities ahead of a spate of earnings reports this week. The dollar rose to the highest level in two months, while the pound slumped.
After initially opening higher, the S&P 500 and Dow Jones Industrial Average fell before pushing higher again, led by gains in tech companies. In China, the Shanghai Composite Index surged more than 4 per cent, the biggest increase since March 2016, in the wake of verbal interventions from authorities at the end of last week and plans to cut personal income taxes. Chinese President Xi Jinping vowed “unwavering” support for the country’s private sector.
“The biggest headwind that this market has right now — and there’s a lot of them — it’s getting something accomplished on trade with China,” said Art Hogan, chief market strategist at B Riley FBR. “That can be lost in the parade of earnings that were going to hear from and have heard from.”
Risks still abound across global markets, from the continuing U.S.-China trade showdown and tension surrounding the killing of a Saudi journalist to Italian budget fears and President Donald Trump’s unpredictable actions ahead of American midterm elections. Still, equities were attempting to bounce back after a miserable few weeks, and company results from the likes of Amazon, Alphabet, Microsoft and Intel as well as U.S. growth data may provide a welcome stimulus in the coming days.
“It’s early days with under 15 per cent of companies having reported [earnings], but the beats have been above average, and margin strength has continued despite some concerns about higher input costs,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management. “That said, corporate earnings calls have highlighted several potential and real headwinds as we face 2019.”
Elsewhere, commodities were mixed. Brent crude hovered close to US$80 per barrel and gold dropped. Emerging-market stocks jumped. The South African rand rallied before the country’s budget.
And these are the main moves in markets:
Stocks
Canadian stocks traded lower. The S&P/TSX Composite Index was down 59.09 points to 15,411.01 as of 11:27 a.m. ET.
The S&P 500 rose 0.2 per cent as of 10:51 a.m. in New York, while the Dow Jones Industrial Average increased 0.1 per cent and the Nasdaq Composite Index gained 0.9 per cent. The Stoxx Europe 600 fell 0.5 per cent. The U.K.’s FTSE 100 was little changed. Germany’s DAX Index edged 0.4 per cent lowerr. The MSCI Emerging Market Index jumped 1.1 per cent. The MSCI Asia Pacific Index increased 0.5 per cent.
Currencies
The Bloomberg Dollar Spot Index increased 0.2 per cent. The euro weakened 0.3 per cent to US$1.1479. The British pound fell 0.8 per cent to US$1.2976. The Japanese yen weakened 0.1 per cent to 112.68 per dollar.
Bonds
The yield on 10-year Treasuries dropped one basis point to 3.18 per cent, while the two-year note yield fell less than one basis point to 2.90 per cent. Germany’s 10-year yield fell two basis points to 0.44 per cent.
Commodities
Brent crude decreased 0.1 per cent to US$79.68 a barrel. Gold dropped 0.5 per cent to US$1,221.12 an ounce.
With files from BNN Bloomberg
Source: BNN Bloomberg
https://www.bnnbloomberg.ca/stocks-fluctuate-ahead-of-earnings-as-u-s-dollar-rises-1.1155697
