Stocks Gain, Bonds Fall on US Push to End Shutdown: Markets Wrap
(Bloomberg) — Stocks rallied and bonds fell as optimism that lawmakers are moving closer to a deal ending the longest shutdown in US history spurred demand for risky assets.
S&P 500 futures rose 0.8% after a group of Senate Democrats broke with their party on a procedural measure to help Republicans advance a funding bill. Nasdaq 100 contracts gained 1.2% after the underlying index suffered its worst week since April. European stocks climbed the most in two weeks.
Most commodities gained ground, with gold, silver and copper all higher. US Treasuries fell across the curve, pushing the 10-year yield up four basis points to 4.14%. Bitcoin headed for back-to-back gains, while the dollar was little changed.
Ending the shutdown would give investors greater clarity on key economic data such as jobs and inflation, helping to lift the fog around the Federal Reserve’s path on interest rates. While hopes for a deal may offer some relief, markets remain concerned after last week’s sharp selloff in technology shares reignited worries about stretched valuations.
“It’s only the opening act in what could still be a drawn-out political drama, but investors are seizing on any sign of progress,” said Ipek Ozkardeskaya, a senior analyst at Swissquote. “They need to understand where the US economy stands, where inflation and jobs are headed and what the Fed should do next.”
The Senate voted 60-40 on a procedural measure to advance the bill, but hasn’t yet scheduled a vote for final passage. The House also needs to approve the measure before it goes to President Donald Trump’s desk for his signature.
It’s not yet clear how quickly the shutdown can end. The Senate will need the consent of all members for it to happen quickly. Any one senator can force days of procedural delays. Speaker Mike Johnson has also said he will give House lawmakers two days’ notice to return to Washington.
What Bloomberg strategists say…
Global investors were angsty last week about AI valuations and how much has been priced into stocks. However, Nvidia’s earnings outlook next week is likely to follow its solid track record of reestablishing the positivity for Asia and global tech stocks — as well as Korean equities, in particular.
— Mark Cranfield, MLIV strategist. For full analysis, click here.
Corporate News:
Diageo Plc named Dave Lewis, the former head of supermarket chain Tesco Plc, its new chief executive officer as the maker of Guinness stout and Johnnie Walker seeks to reboot after a period turmoil. Nvidia Corp. Chief Executive Officer Jensen Huang said he had asked Taiwan Semiconductor Manufacturing Co. for more chip supplies as artificial intelligence demand remained strong. TSMC also reported slowing growth in its revenue in October, potentially another indication that AI demand was moderating as the market turns frothy. Private equity firm Permira is nearing an agreement to acquire JTC Plc, the London-listed provider of fund solutions and corporate services, according to people familiar with the matter. Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 1% as of 8:26 a.m. London time S&P 500 futures rose 0.8% Nasdaq 100 futures rose 1.3% Futures on the Dow Jones Industrial Average rose 0.1% The MSCI Asia Pacific Index rose 0.9% The MSCI Emerging Markets Index rose 1.3% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1575 The Japanese yen fell 0.4% to 154.03 per dollar The offshore yuan was little changed at 7.1205 per dollar The British pound was little changed at $1.3174 Cryptocurrencies
Bitcoin rose 1.7% to $106,264.89 Ether rose 0.8% to $3,609.25 Bonds
The yield on 10-year Treasuries advanced four basis points to 4.14% Germany’s 10-year yield advanced two basis points to 2.69% Britain’s 10-year yield advanced two basis points to 4.49% Commodities
Brent crude rose 0.8% to $64.12 a barrel Spot gold rose 1.9% to $4,078.98 an ounce This story was produced with the assistance of Bloomberg Automation.
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