U.S. Stocks Bounce Back While Treasuries Sag on Factory Data
March 18, 2014 8:17 am
U.S. stocks revive from the weakest weekly drop since January and Treasuries backslide as better-than-estimated economic data overshadowed concern over Ukraine. Russian shares advanced with the ruble.
The Standard & Poor’s 500 Index increased 1 percent to 1,858.83 following last week’s 2 percent decline. Ten-year Treasury yields rallied four basis points to 2.69 percent by 5:11 p.m. in New York. Moscow’s Micex Index skyrocketed 3.7 percent after four days of drops. The ruble empowered while the yen plunged down versus 15 of 16 major counterparts. Commodities declined, with corn and wheat pulling low in the middle of indications of steady exports from Ukraine amid the political turmoil, while oil relinquished 0.8 percent.
Factory production in the U.S. increased in February by the most in six months, signaling the industry is re emerging after a severe winter. About 97 percent of voters in Crimea chose to leave Ukraine and become part of Russia in a referendum deemed illegal by the U.S. and the European Union. China’s yuan tumbled to an 11-month low against the dollar after the central bank doubled the currency’s trading band.
“There was always fear that it could be worse,” Paul Zemsky, the head of multi-asset strategies at ING U.S. Investment Management, which oversees $200 billion, said by phone from New York. “The world looks a little less dangerous and the U.S. looks a little stronger in its economic growth.”
The S&P 500 bolstered after retreating the most since January last week, deleting its 2014 increases amid surging tension between Russia and Ukraine and indications of an economic slowdown in China. The index jump 0.6 percent for the year.
Yahoo, Hertz
Yahoo! Inc. climbed 4 percent today after Chinese e-commerce firm Alibaba Group Holding Ltd. started the process to record shares in the U.S. Hertz Global Holdings Inc. increased 4.8 percent after a report that the firm will spin off its equipment-rentals unit.
Data from the Federal Reserve displayed factory production in the U.S. rallied in February. The 0.8 percent increase followed a revised 0.9 percent decline in the prior month that was the peak post since May 2009. The median forecast called for a 0.3 percent hike.
The Fed starts a two-day assembly tomorrow that analysts stated that it will see policy makers further scale back the stimulatory bond purchasing program. The Federal Open Market Committee has trim down monthly purchases to $65 billion from $85 billion in December. Policy makers have signalled that they plan to taper by $10 billion at each assembly absent a weakening in the economy.
Fed Stimulus
Fed Chair Janet Yellen announced last month that the U.S. economy was stable enough to withstand measured trim downs to the central bank’s bond purchases. Three rounds of Fed stimulus have helped kicked the S&P 500 up 175 percent from a 12-year low, as U.S. equities enter the sixth year of a bull market that started March 9, 2009.
“They’re going to taper down to $55 billion — the more important element will be forward rate guidance,” said Thomas Simons, a government-debt economist in New York at Jefferies LLC, one of 22 primary dealers that trade with the Fed. “Manufacturing over the last few months showed points of weakness, mostly being attributable to weather. We’re starting to see signs of stabilization.”
Ten-year Treasury yields marched higher after declining 13 basis points, or 0.13 percentage point, last week, the most in two months, Bloomberg Bond Trader data displayed.
Global stocks relinquished $1.4 trillion in worth last week amid investor concern over Russia’s movements in Crimea and China’s slowing economy.
Russia Penalties
The U.S. and EU imposed penalties on Russia today in the worst dispute between former Cold War enemies in more than two decades. EU foreign ministers settled to freeze assets and impose visa travel bans on 21 Russians, Crimeans and former Ukrainian officials. U.S. measures were aimed at the wealth of Russia’s supporters, the White House said in a statement.
While Western leaders left open the option of extending the penalties, they kept more punitive steps in reserve.
“The sanctions were a huge factor for the markets,” Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott LLC, which oversees $63 billion in assets, said by phone. “Instead of there being outright economic sanctions which could have had trade implications, they were more on an individual basis.”
The Stoxx Europe 600 Index soared 1.1 percent as about 11 stocks surged for each that decline. The gauge missed 3.3 percent last week, the most since January. All but one of 19 industry groups in the measure hiked amid renewed merger-and-acquisition activity.
European Movers
RWE AG boosted 1.3 percent after L1 Energy agreed to purchase the utility’s Dea oil and gas unit for 5.1 billion euros ($7.1 billion). Vodafone Group Plc soared 1.7 percent after the world’s second-biggest wireless carrier agreed to purchase Spanish cable operator Grupo Corporativo Ono SA for 7.2 billion euros.
Euro-area inflation surprisingly slowed in February, keeping pressure on the European Central Bank to defend the region versus declining financial values. Consumer financial values rallies an annual 0.7 percent, down from an primary projection of 0.8 percent, the EU’s statistics office in Luxembourg said today.
The MSCI Emerging Markets Index bolstered 0.6 percent today, the most in more than a week. Stock markets in the Czech Republic, Hungary, Turkey and Poland each climbed more than 1.5 percent.
Russia’s Micex bounced back from a four-year low. Russian stocks have downgraded 11 percent this month as the Ukraine crisis intensified following President Vladimir Putin’s decision to send troops into Crimea.
Ruble Bounces Back
The ruble leaped 0.7 percent versus the dollar. The yen sag down for the first time in six days, relinquishing 0.4 percent to 101.76 per dollar after soaring 1.9 percent last week as investors sought a safe haven. Japan’s currency gave up 0.5 percent to 141.68 per euro.
The 17-nation shared currency inched up 0.1 percent to $1.3922. Switzerland’s franc backslide 0.2 percent to 1.2157 per euro.
The currency “market seems to be very calm,” David Bloom, head of global currency strategy at HSBC Holdings Plc in London, said in an interview on Bloomberg TV’s ‘The Pulse,’’’ with Francine Lacqua and Guy Johnson. “The market is not joining the dots and saying there’s a global problem. The market’s saying these are local isolated problems.”
Commodities Sag Down
The S&P GSCI gauge of 24 commodities depreciated 1.1 percent as corn pulled back 1.4 percent and wheat sank 1.9 percent. Ukraine loaded close to 700,000 metric tons of corn last week, according to Paris-based farm adviser Agritel, which has an office in Kiev. A Chinese feed mill bought more than 50,000 tons of Ukraine corn, a purchasing manager said. Ukraine is the third-largest exporter of corn and sixth-biggest in wheat.
West Texas Intermediate and Brent crude’s declined on speculation that Crimea’s vote to leave Ukraine and join Russia is unlikely to disrupt oil shipments. WTI slumped 0.8 percent to $98.08 a barrel, while Brent decreased 1.8 percent to $106.24 in London.
Gold backed down from a six-month high as the U.S. factory data curbed demand for the metal as a safe-haven investment. Futures inched down 0.4 percent to $1,372.90.
U.S. natural gas advanced 2.5 percent as cold weather boosted demand for heating fuel.
The MSCI All-Country World Index jumped 0.8 percent today following its largest weekly decline since June. The MSCI Asia Pacific Index gave up 0.2 percent, extending its largest weekly sag down since May 2012. The Hang Seng China Enterprises Index in Hong Kong soared 0.4 percent to snap a five-day decline. The Shanghai Composite Index skyrocketed 1 percent after depreciating 2.6 percent last week.
Asian Futures
Asian stock-index futures climb higher in recent trading, with contracts on Japan’s Nikkei 225 Stock Average advancing at least 0.9 percent in Osaka and Chicago. Futures on Australia’s S&P/ASX 200 Index hiked 0.4 percent, contracts on South Korea’s Kospi Index escalated 0.7 percent and futures on the Hang Seng and Hang Seng China Enterprises gauges marched higher at least 0.4 percent.
The yuan slumped for a second day after the People’s Bank of China said March 15 that the currency will be able to trade as much as 2 percent on either side of a daily central bank reference rate, from 1 percent previously.
The decision underscores pledges from China’s leaders to make the exchange rate more market based and advertise freer action of capital for investment purposes.
The material has been provided by InstaForex Company – www.instaforex.com
U.S. stocks revive from the weakest weekly drop since January and Treasuries backslide as better-than-estimated economic data overshadowed concern over Ukraine. Russian shares advanced with the ruble.
The Standard & Poor’s 500 Index increased 1 percent to 1,858.83 following last week’s 2 percent decline. Ten-year Treasury yields rallied four basis points to 2.69 percent by 5:11 p.m. in New York. Moscow’s Micex Index skyrocketed 3.7 percent after four days of drops. The ruble empowered while the yen plunged down versus 15 of 16 major counterparts. Commodities declined, with corn and wheat pulling low in the middle of indications of steady exports from Ukraine amid the political turmoil, while oil relinquished 0.8 percent.
Factory production in the U.S. increased in February by the most in six months, signaling the industry is re emerging after a severe winter. About 97 percent of voters in Crimea chose to leave Ukraine and become part of Russia in a referendum deemed illegal by the U.S. and the European Union. China’s yuan tumbled to an 11-month low against the dollar after the central bank doubled the currency’s trading band.
“There was always fear that it could be worse,” Paul Zemsky, the head of multi-asset strategies at ING U.S. Investment Management, which oversees $200 billion, said by phone from New York. “The world looks a little less dangerous and the U.S. looks a little stronger in its economic growth.”
The S&P 500 bolstered after retreating the most since January last week, deleting its 2014 increases amid surging tension between Russia and Ukraine and indications of an economic slowdown in China. The index jump 0.6 percent for the year.
Yahoo, Hertz
Yahoo! Inc. climbed 4 percent today after Chinese e-commerce firm Alibaba Group Holding Ltd. started the process to record shares in the U.S. Hertz Global Holdings Inc. increased 4.8 percent after a report that the firm will spin off its equipment-rentals unit.
Data from the Federal Reserve displayed factory production in the U.S. rallied in February. The 0.8 percent increase followed a revised 0.9 percent decline in the prior month that was the peak post since May 2009. The median forecast called for a 0.3 percent hike.
The Fed starts a two-day assembly tomorrow that analysts stated that it will see policy makers further scale back the stimulatory bond purchasing program. The Federal Open Market Committee has trim down monthly purchases to $65 billion from $85 billion in December. Policy makers have signalled that they plan to taper by $10 billion at each assembly absent a weakening in the economy.
Fed Stimulus
Fed Chair Janet Yellen announced last month that the U.S. economy was stable enough to withstand measured trim downs to the central bank’s bond purchases. Three rounds of Fed stimulus have helped kicked the S&P 500 up 175 percent from a 12-year low, as U.S. equities enter the sixth year of a bull market that started March 9, 2009.
“They’re going to taper down to $55 billion — the more important element will be forward rate guidance,” said Thomas Simons, a government-debt economist in New York at Jefferies LLC, one of 22 primary dealers that trade with the Fed. “Manufacturing over the last few months showed points of weakness, mostly being attributable to weather. We’re starting to see signs of stabilization.”
Ten-year Treasury yields marched higher after declining 13 basis points, or 0.13 percentage point, last week, the most in two months, Bloomberg Bond Trader data displayed.
Global stocks relinquished $1.4 trillion in worth last week amid investor concern over Russia’s movements in Crimea and China’s slowing economy.
Russia Penalties
The U.S. and EU imposed penalties on Russia today in the worst dispute between former Cold War enemies in more than two decades. EU foreign ministers settled to freeze assets and impose visa travel bans on 21 Russians, Crimeans and former Ukrainian officials. U.S. measures were aimed at the wealth of Russia’s supporters, the White House said in a statement.
While Western leaders left open the option of extending the penalties, they kept more punitive steps in reserve.
“The sanctions were a huge factor for the markets,” Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott LLC, which oversees $63 billion in assets, said by phone. “Instead of there being outright economic sanctions which could have had trade implications, they were more on an individual basis.”
The Stoxx Europe 600 Index soared 1.1 percent as about 11 stocks surged for each that decline. The gauge missed 3.3 percent last week, the most since January. All but one of 19 industry groups in the measure hiked amid renewed merger-and-acquisition activity.
European Movers
RWE AG boosted 1.3 percent after L1 Energy agreed to purchase the utility’s Dea oil and gas unit for 5.1 billion euros ($7.1 billion). Vodafone Group Plc soared 1.7 percent after the world’s second-biggest wireless carrier agreed to purchase Spanish cable operator Grupo Corporativo Ono SA for 7.2 billion euros.
Euro-area inflation surprisingly slowed in February, keeping pressure on the European Central Bank to defend the region versus declining financial values. Consumer financial values rallies an annual 0.7 percent, down from an primary projection of 0.8 percent, the EU’s statistics office in Luxembourg said today.
The MSCI Emerging Markets Index bolstered 0.6 percent today, the most in more than a week. Stock markets in the Czech Republic, Hungary, Turkey and Poland each climbed more than 1.5 percent.
Russia’s Micex bounced back from a four-year low. Russian stocks have downgraded 11 percent this month as the Ukraine crisis intensified following President Vladimir Putin’s decision to send troops into Crimea.
Ruble Bounces Back
The ruble leaped 0.7 percent versus the dollar. The yen sag down for the first time in six days, relinquishing 0.4 percent to 101.76 per dollar after soaring 1.9 percent last week as investors sought a safe haven. Japan’s currency gave up 0.5 percent to 141.68 per euro.
The 17-nation shared currency inched up 0.1 percent to $1.3922. Switzerland’s franc backslide 0.2 percent to 1.2157 per euro.
The currency “market seems to be very calm,” David Bloom, head of global currency strategy at HSBC Holdings Plc in London, said in an interview on Bloomberg TV’s ‘The Pulse,’’’ with Francine Lacqua and Guy Johnson. “The market is not joining the dots and saying there’s a global problem. The market’s saying these are local isolated problems.”
Commodities Sag Down
The S&P GSCI gauge of 24 commodities depreciated 1.1 percent as corn pulled back 1.4 percent and wheat sank 1.9 percent. Ukraine loaded close to 700,000 metric tons of corn last week, according to Paris-based farm adviser Agritel, which has an office in Kiev. A Chinese feed mill bought more than 50,000 tons of Ukraine corn, a purchasing manager said. Ukraine is the third-largest exporter of corn and sixth-biggest in wheat.
West Texas Intermediate and Brent crude’s declined on speculation that Crimea’s vote to leave Ukraine and join Russia is unlikely to disrupt oil shipments. WTI slumped 0.8 percent to $98.08 a barrel, while Brent decreased 1.8 percent to $106.24 in London.
Gold backed down from a six-month high as the U.S. factory data curbed demand for the metal as a safe-haven investment. Futures inched down 0.4 percent to $1,372.90.
U.S. natural gas advanced 2.5 percent as cold weather boosted demand for heating fuel.
The MSCI All-Country World Index jumped 0.8 percent today following its largest weekly decline since June. The MSCI Asia Pacific Index gave up 0.2 percent, extending its largest weekly sag down since May 2012. The Hang Seng China Enterprises Index in Hong Kong soared 0.4 percent to snap a five-day decline. The Shanghai Composite Index skyrocketed 1 percent after depreciating 2.6 percent last week.
Asian Futures
Asian stock-index futures climb higher in recent trading, with contracts on Japan’s Nikkei 225 Stock Average advancing at least 0.9 percent in Osaka and Chicago. Futures on Australia’s S&P/ASX 200 Index hiked 0.4 percent, contracts on South Korea’s Kospi Index escalated 0.7 percent and futures on the Hang Seng and Hang Seng China Enterprises gauges marched higher at least 0.4 percent.
The yuan slumped for a second day after the People’s Bank of China said March 15 that the currency will be able to trade as much as 2 percent on either side of a daily central bank reference rate, from 1 percent previously.
The decision underscores pledges from China’s leaders to make the exchange rate more market based and advertise freer action of capital for investment purposes.
The material has been provided by InstaForex Company – www.instaforex.com
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