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Stock traders shake off early tremors; Rise In Bonds: Markets Wrap

(Bloomberg) – The stock market made up its previous losses, led by a surge in so-called defensive companies. Treasuries climbed.

Health and utility stocks drove the S&P 500 up, offsetting declines in commodity and retail stocks. Apple Inc. rose to a record. Stocks fell in the early hours of trading after weaker economic data and the spread of the Coronavirus Delta variant sparked concerns that the global recovery is stalling. Tesla Inc. fell when the US opened an investigation into the electric vehicle maker’s autopilot system.

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Traders awaited signals from the Federal Reserve, with a town hall chaired by Chairman Jerome Powell possibly serving as the precursor to the Jackson Hole Symposium in late August on Tuesday. The market has viewed the event as a place for the Fed to determine the timing and contours of its anticipated move to curb the bond-buying program.

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“The big question hanging over the market is the Fed’s – when will the Fed move, when will the Fed rejuvenate,” said Fiona Cincotta, senior financial markets analyst at City Index. “What we do know is that the recovery will be bumpy – it won’t be straight.”

In mid-August, the S&P 500 is on track for one of the quietest months ever. Beneath the surface, fear of what is to come shows little evidence that it will go away. A measure of the implied volatility of VIX options has risen for five weeks out of seven – although the Cboe volatility index continued to fall.

Citigroup Inc.’s Tobias Levkovich warned that investors should be prepared for more volatility as the Fed’s tightening, the possibility of higher taxes, margin pressures and sustained inflation become forces “to which the bond market must respond.”

“We’re a little more cautious,” Citigroup’s chief US equity strategist said in an interview with Bloomberg TV, adding that these four potential problems “could merge around September” if the valuation is expanded.

The story goes on

Here are some events to watch this week:

Federal Reserve Chairman Powell invites educators for a discussion at City Hall on Tuesday Retail sales are due Tuesday, the Reserve Bank of Australia minutes are expected to be released on Tuesday

For more market analysis, check out our MLIV blog.

These are the main moves in the markets:

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The S&P 500 barely changed until 2:09 p.m. New York time The Nasdaq 100 fell 0.4% The Dow Jones Industrial Average barely changed The MSCI World Index fell 0.4%

Currencies

The Bloomberg Dollar Spot Index rose 0.1% The euro fell 0.2% to $ 1.1777 The British pound fell 0.2% to $ 1.3844 The Japanese yen rose 0.3% to 109, $ 22 per dollar

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The yield on 10-year government bonds fell by three basis points to 1.24%. Germany’s 10-year yield remained little changed at -0.47%, while Britain’s 10-year yield remained little changed at 0.57%

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West Texas Intermediate Crude Oil fell 1.6% to $ 67.33 an ounce. Gold futures rose 0.6% to $ 1,788.80 an ounce

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