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Technology Spurs Stock Rebound; Treasuries Decline: Markets Wrap

Sarah Ponczek and Vildana Hajric
Technology Spurs Stock Rebound; Treasuries Decline: Markets Wrap

(Bloomberg) -- Beaten-down tech shares led the strongest session for U.S. stocks in two weeks, extending the run of turbulence that has made this month one of the wildest of the past five years.

The S&P 500 roared back from the worst week in a month as investors speculated a strong start to the holiday season will keep economic growth on track. Amazon.com and L Brands led gains among retailers, while Microsoft was among the tech leaders.

Positive political developments in Europe and rising oil prices added to optimism, sending the 10-year Treasury yield higher ahead of a slew of Federal Reserve speakers this week, including Chairman Jerome Powell. The dollar advanced, while West Texas crude rose above $51 a barrel following a more than 7 percent slide on Friday.

“Today is a relief rally. I don’t know if it will last through today and to tomorrow, but markets are moving a lot off of not a lot of news,” Larry Benedict, founder of The Opportunistic Trader, said in a phone interview. “Tech is bouncing a little bit. It still looks heavy. FANG stocks have taken massive hits.”

Investors will scour this week’s Fed speech and policy minutes for clues on the future of rates. After stock markets skidded last week, and with bond traders reducing expectations for the pace of U.S. monetary policy tightening, Powell has the opportunity to shed light on prospects for a pause in a speech Wednesday. The sit-down between Presidents Xi Jinping and Donald Trump has heightened hopes of a resolution to the trade war ahead of the next escalation of tariffs.

Elsewhere, Italy’s bonds jumped as state officials began studying scenarios for a lower 2019 budget deficit target, while European shares rose after EU leaders signed off over the weekend on the proposed Brexit plan. Bitcoin extended its recent tumble to below $4,000 as cryptocurrencies fell across the board.

Terminal subscribers can read our Markets Live blog.

Coming Up

Presidents Donald Trump and Xi Jinping plan to meet at the G-20 summit in Argentina that kicks off on Friday.Federal Reserve Vice Chairman Richard Clarida speaks in New York on Tuesday and Powell addresses the New York Economic Club on Wednesday. Thursday sees the release of the minutes from the Federal Open Market Committee’s November meeting.

These are the main moves in markets:

Stocks

The S&P 500 Index gained 1.6 percent as of 4 p.m. New York time, the most since Nov. 7. The Nasdaq 100 advanced 2.3 percent. The Stoxx Europe 600 Index rose 1.2 percent. Italy’s FTSE MIB Index jumped 2.8 percent, the largest surge in more than five months.The MSCI All-Country World Index climbed 1.1 percent.

Currencies

The Bloomberg Dollar Spot Index rose 0.2 percent.The euro was little changed at 1.1333.The British pound was little changed at $1.2812.The Japanese yen dipped 0.6 percent to 113.62 per dollar.

Bonds

The yield on 10-year Treasuries gained three basis points to 3.06 percent, its first advance in more than two weeks.Italy’s 10-year yield fell 14 basis points to 3.269 percent, the lowest in almost two months.Germany’s 10-year yield climbed two basis points to 0.36 percent.Britain’s 10-year yield increased three basis points to 1.413 percent.

Commodities

West Texas Intermediate crude gained 2.3 percent to $51.58 a barrel.Gold fell 0.1 percent to $1,222.50 an ounce.

--With assistance from Todd White.

To contact the reporters on this story: Sarah Ponczek in New York at sponczek2@bloomberg.net;Vildana Hajric in New York at vhajric1@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Randall Jensen, Yakob Peterseil

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