US Shares Advance as Information Presentations Sturdy Economic system: Markets Wrap

(Bloomberg) — Stocks are rallying after China pledged fiscal stimulus and latest economic data highlighted the strength of the US economy.

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The S&P 500 rose after revised data showed the US economy emerged from the pandemic in better shape than initially expected. A decline in US jobless claims underscored the resilience of the labor market.

Micron Technology Inc.’s post-earnings surge and US-listed China stocks advancing boosted equities. The Nasdaq 100 climbed more than 1%. In Europe, the Stoxx 600 index headed for a record close. The dollar stayed lower. The 10-year US Treasury yield lingered around 3.77%.

The promises by China’s Politburo, alongside growing expectations that the Federal Reserve and European Central Bank will push ahead with rate cuts, contributed to market ebullience. Fed Chair Jerome Powell’s address on Thursday didn’t include commentary on the economic outlook or path for monetary policy. Other Fed officials are also speaking at various events today, with traders tuning in for clues on the central bank’s trajectory.

“The message, over the last 10 days or so, from monetary and fiscal policymakers across the globe, has been clear and undeniable — the policy ‘put’ is well and truly back,” said Michael Brown, a strategist at Pepperstone Group Ltd. “The path of least resistance is likely to continue to lead to the upside, over both the short- and medium-term.”

Money markets have flipped to favor a half-point cut by the Fed in November, with traders now pricing almost 39 basis points of reductions after lackluster US consumer data earlier in the week.

The US central bank’s preferred price metric and a snapshot of consumer demand will give more clues on the economy’s health on Friday.

“The Federal Reserve is more concerned about growth than they let on,” said Vanguard Chief Economist Joe Davis on Bloomberg TV. “Our view is they are going to be more aggressive in the near term.”

China Doubts

The bid to revive growth by China’s top leaders on Thursday added to a slew of measures from Beijing this week that have supercharged local assets. The CSI 300 Index is headed for its biggest weekly gain in almost a decade.

But questions remain over the long-term impact of the measures.

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“I wouldn’t be surprised if tomorrow we are going to see a bit of a pullback,” Helen Jewell, chief investment officer at BlackRock Fundamental Equities EMEA, told Bloomberg TV. “This is what is happening in the markets right now — you end up risk on one day, risk off the next day. The Chinese economy is still very fragile.”

Swiss Cut

Elsewhere, the Swiss National Bank made a 25 basis-point interest rate cut in an effort to contain the strength of the Swiss franc, which has had the strongest rally in nearly a decade.

In commodities, oil fell for a second day as Saudi Arabia was reported to be weighing increasing output, and factions in Libya reached a deal that opens the way to the return of some crude production.

Key events this week:

• ECB President Christine Lagarde speaks, Thursday

• China industrial profits, Friday

• Eurozone consumer confidence, Friday

• US PCE, University of Michigan consumer sentiment, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.7% as of 9:31 a.m. New York time

• The Nasdaq 100 rose 1.4%

• The Dow Jones Industrial Average rose 0.6%

• The Stoxx Europe 600 rose 1.3%

• The MSCI World Index rose 0.9%

Currencies

• The Bloomberg Dollar Spot Index fell 0.4%

• The euro rose 0.2% to $1.1157

• The British pound rose 0.3% to $1.3370

• The Japanese yen rose 0.2% to 144.41 per dollar

Cryptocurrencies

• Bitcoin rose 1.3% to $64,330.42

• Ether rose 1.6% to $2,622.51

Bonds

• The yield on 10-year Treasuries declined one basis point to 3.77%

• Germany’s 10-year yield declined five basis points to 2.13%

• Britain’s 10-year yield declined one basis point to 3.98%

Commodities

• West Texas Intermediate crude fell 3.5% to $67.24 a barrel

• Spot gold rose 0.4% to $2,667.22 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Winnie Hsu, Divya Patil, Richard Henderson, Ben Priechenfried, James Hirai and Sujata Rao.

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