Stocks Get Earnings Boost as Traders Focus on Iran: Markets Wrap
(Bloomberg) — Stocks rose amid strong corporate earnings as traders waited to see if Iran will join talks that could restore oil flows from the Middle East. The dollar gained and Treasuries wavered ahead of Kevin Warsh’s Senate hearing.
Futures for the S&P 500 climbed 0.3%. Brent slipped 1.1% to below $95 a barrel, with President Donald Trump saying negotiations between the US and Iran could begin as early as Tuesday. UnitedHealth Group Inc. rose more than 6% in early trading on a first-quarter profit beat. General Electric Co. also topped estimates.
All eyes are on the Middle East after Trump signaled he is unlikely to extend a two-week ceasefire in a war that’s upended global oil markets. Tehran has yet to confirm that it will take part in the Islamabad talks, with Trump threatening strikes on the Islamic Republic’s power infrastructure if diplomacy fails.
“The bar for positive news is low, and developments suggest an inching toward a resolution,” said Laura Cooper, investment strategist and head of macro credit at Nuveen. “That said, ongoing uncertainty and second-order growth effects from prolonged supply disruptions raise questions of complacency.”
European stocks rose 0.2%. Gold dipped 0.7% to below $4,800 an ounce. Apple Inc. fell 0.3% in early trading as the iPhone-maker named a successor to Chief Executive Officer Tim Cook. The yield on benchmark 10-year Treasuries was little changed at 4.25%, while the rate on their two-year counterparts was one basis point higher at 3.74%.
In what could be the most contentious confirmation hearing for a Federal Reserve chair nominee in decades, Warsh is scheduled to appear before the Senate Banking Committee. Investors will be keen to hear how strongly he argues for near-term interest rate cuts amid inflation risks stemming from higher oil prices.
In prepared remarks released on Monday, Warsh said he was “committed to ensuring that the conduct of monetary policy remains strictly independent” and that “policy independence is earned — and better policy decisions crafted — by steering clear of distractions.” Money markets are currently pricing around a 50% chance of a Fed cut by December.
“Warsh represents a potential regime shift in how the Fed communicates,” said Florence Pisani, global head of economic research at Candriam. “His preference is for a policy rooted in ‘reality’ rather than forecasts. This pivot away from forward guidance may fundamentally change bond market behavior, as investors will no longer have the same predictable roadmap for policy shifts.”
UK gilts underperformed European peers as former top British bureaucrat Olly Robbins said he felt political pressure to clear Peter Mandelson to become US ambassador.
Robbins’ testimony will place Prime Minister Keir Starmer under further scrutiny amid allegations that he misled Parliament when he said “due process” had been followed during Mandelson’s appointment. The pound fell 0.2%.
In a key economic report also due on Tuesday, analysts forecast a jump in overall retail sales in March. Excluding gasoline and autos, the picture likely remained more subdued as high fuel costs prompted consumers to squeeze spending on other categories.
“It will be interesting to follow these numbers to see if record low consumer confidence in the US translates into lower actual spending,” said George Moran, European macro strategist at RBC. “But, we will need a few months of data before making a firm conclusion.”
Corporate Highlights:
General Electric Co.’s first-quarter profit beat Wall Street’s expectations as strong demand for air travel helped the jet-engine manufacturer sidestep disruptions tied to the war in Iran. UnitedHealth Group Inc. reported first quarter profit that blew past Wall Street expectations and boosted its outlook for the year. Apple Inc. Chief Executive Officer Tim Cook will hand the reins to hardware boss John Ternus later this year, capping a 15-year tenure that turned the company into a $4 trillion business spanning watches, video streaming and financial services. Amazon.com Inc. is investing an additional $5 billion in Anthropic PBC and may inject $20 billion more over time, a deal that strengthens ties in in an increasingly competitive artificial intelligence race. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.3% as of 6:36 a.m. New York time Nasdaq 100 futures rose 0.4% Futures on the Dow Jones Industrial Average rose 0.5% The Stoxx Europe 600 rose 0.2% The MSCI World Index was little changed Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.2% to $1.1760 The British pound fell 0.2% to $1.3508 The Japanese yen fell 0.2% to 159.20 per dollar Cryptocurrencies
Bitcoin rose 0.3% to $76,563.88 Ether fell 0.4% to $2,329.27 Bonds
The yield on 10-year Treasuries was little changed at 4.25% Germany’s 10-year yield was little changed at 2.97% Britain’s 10-year yield was little changed at 4.83% Commodities
West Texas Intermediate crude fell 1.4% to $88.36 a barrel Spot gold fell 0.7% to $4,785.49 an ounce This story was produced with the assistance of Bloomberg Automation.
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