Stocks Rise as Trade Tensions Ease; Bonds Decline: Markets Wrap

U.S. stocks advanced, while Treasuries edged lower as investors weighed the latest turns in the trade war between the world’s two largest economies. The dollar rose.

The S&P 500 headed for its third monthly gain in four after rebounding from August’s downturn. Tech fueled the rise after the Trump administration partially refuted a report it would target Chinese capital, reversing some losses sparked by the news Friday. Ten-year Treasury yields trimmed an early advance to trade around 1.69%, about 30 basis points lower than it was at the end of June, after data showed weakening business activity. The dollar pushed quarterly gains toward 2.7%.

The pound rose as Prime Minister Boris Johnson fought off allegations of sexual impropriety and plots in Parliament to oust him over his Brexit plans. West Texas oil fell below $56 a barrel. Gold dipped for a second day, though it was still set for a fourth quarterly gain.

The month is finishing much as it began, with foreign-trade uncertainty once again muddying the outlook for investors. Citigroup said that restricting access to U.S. finance would amount America’s most extreme potential move against China, while a Treasury official said over the weekend that the U.S. has no plans “at this time” to stop Chinese companies from listing on American exchanges. Beijing on Monday vowed to keep opening up its financial markets and encouraging foreign investment, and released a positive report on manufacturing.

“Investors continue to be people who are pulling petals off a daisy saying ‘there will be an accord, there won’t be an accord, there will be an accord, there won’t be.’ Nobody really knows for sure — at least I don’t,” Sam Stovall, chief investment strategist at CFRA, said about trade between the U.S. and China in a phone interview. “Based on the market’s lack of fear, the majority expect some sort of discussion to occur October 10th and that there will be encouraging developments as we move forward.”

Elsewhere, Chinese equities fell in the final session before a week-long holiday. Financial markets and offices in Taipei closed Monday due to the approach of Typhoon Mitag.

Here are some key events coming up this week:

Australia’s monetary policy decision is set for Tuesday, with markets and economists leaning toward a third interest-rate cut for 2019.Euro-zone CPI for September is scheduled for Tuesday.There’s a slew of U.S. data including ISM manufacturing on Tuesday, the ADPWealth Strength IndexAAPL is Extremely Up and trending Up employment report on Wednesday and the monthly jobs report on Friday.The Reserve Bank of India sets policy on Friday.

Here are the main moves in markets:

Stocks

The S&P 500 Index rose 0.5% as of 11:31 a.m. New York time.The Stoxx Europe 600 Index increased 0.3%.The U.K.’s FTSE 100 Index was little changed.

Currencies

The Bloomberg Dollar Spot Index increased 0.2%.The British pound rose 0.1% at $1.2303.The euro declined 0.3% to $1.0905.The Japanese yen decreased 0.1% to 108.01 per dollar.

Bonds

The yield on 10-year Treasuries increased one basis point to 1.69%.Britain’s 10-year yield dipped one basis point to 0.48%.Germany’s 10-year yield advanced less than one basis point to -0.57%.

Commodities

West Texas Intermediate crude sank 1.2% to $55.24 a barrel.Gold decreased 1.1% to $1,489.70 an ounce.

Have a fantastic day and I hope today’s article helps in your trading.