stocks recover; Bond Yields Rise on Fed Bets: Markets Wrap

(Bloomberg) – Stocks saw small movements as the possibility of further Federal Reserve policy tightening pushed up Treasury yields and investors remained on the sidelines amid bank profits.

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The S&P 500 erased losses in afternoon trading in New York. The tech-heavy Nasdaq 100 underperformed major stock benchmarks. Two-year rates rose to around 4.2% as investors scaled back expectations for rate cuts later in the year.

Richmond Fed President Thomas Barkin said he would like more evidence that US inflation is retreating towards the central bank’s 2% target. Manufacturing activity in New York state unexpectedly picked up in April for the first time in five months as new orders and shipments fell.

Charles Schwab Corp. soared as executives said the company could weather the US banking turmoil while it suspended share buybacks in response to the industry’s worst crisis since 2008. State Street Corp. fell as it reported that clients were withdrawing from its investment products.

“The return profile of the current season is quite opaque,” said Peter Kinsella, head of FX strategy at Swiss wealth manager UBP. “Banks did better than expected last week but we’ll have to see how everyone else’s earnings season goes. But the S&P is expensive at current levels, so one has to wonder if there’s really much material upside from here.”

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Important events this week:

• China GDP, Retail Sales, Industrial Production, Tuesday

• US housing construction begins on Tuesday

• Goldman Sachs and Bank of America will release their first-quarter results on Tuesday

• The Fed’s Michelle Bowman discusses digital currencies on Tuesday

• Eurozone CPI, Wednesday

• Fed publishes Beige Book, Wednesday

• The Fed’s John Williams delivers a speech on Wednesday

• The Fed’s Austin Goolsbee will be interviewed on NPR on Wednesday

• Chinese lending rates, Thursday

• Eurozone Consumer Confidence, Thursday

• US Initial Jobless Claims, Existing Home Sales, Index of Leading Economic Indicators, Thursday

• ECB to publish report on March monetary policy meeting, Thursday

• The Fed’s Christopher Waller will speak at an event focused on cryptocurrencies on Thursday

• The Fed’s Patrick Harker speaks on “monetary policy and housing” on Thursday.

• The Fed’s Loretta Mester discusses the economic and policy outlook on Thursday

• The Fed’s Raphael Bostic discusses regional and national economic conditions on Thursday

• The Fed’s Michelle Bowman and Lorie Logan will speak at Thursday’s event

• Eurozone PMIs, Friday

• Japan CPI, Friday

• The Fed’s Lisa Cook discusses economic research at an event on Friday

The story goes on

Some of the key movements in the market:

Shares

• The S&P 500 was up 0.3% as of 4 p.m. New York time

• The Nasdaq 100 has changed little

• The Dow Jones Industrial Average rose 0.3%

• The MSCI World Index has hardly changed

currencies

• The Bloomberg Dollar Spot Index rose 0.4%

• The euro fell 0.6% to $1.0930

• The British pound fell 0.3% to $1.2377

• The Japanese yen fell 0.5% to 134.43 per dollar

cryptocurrencies

• Bitcoin fell 2.9% to $29,481.61

• Ether fell 2% to $2,079.33

Bind

• The 10-year government bond yield rose eight basis points to 3.59%

• The 10-year German government bond yield rose three basis points to 2.47%

• The 10-year UK government bond yield rose 2 basis points to 3.69%

raw materials

• West Texas Intermediate Crude fell 1.9% to $80.92 a barrel

• Gold futures fell 0.4% to $2,008.30 an ounce

This story was created with the support of Bloomberg Automation.

–Assisted by Vildana Hajric, Angel Adegbesan, Isabelle Lee, Peyton Forte and Emily Graffeo.

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