US stocks mixed after historic rally to all-time high - BNN

Stocks extended gains after closing at a record for the first time since the pandemic started. Treasuries rose.

The S&P 500 rose for a third day as investors assessed earnings from retailers and the latest on stimulus talks ahead of the Federal Reserve’s meeting minutes. The Nasdaq 100 underperformed. Target Corp. surged as sales trounced analysts’ estimates, brushing off concerns that demand would ebb after consumers spent their relief checks. Lowe’s Cos. gained on strong summer sales, while TJX Cos. dropped on disappointing results. Momenta Pharmaceuticals Inc. soared as Johnson & Johnson agreed to acquire the company for about US$6.5 billion.

After the buying stampede that pushed American stocks up more than 50 per cent in five months, there’s growing debate on whether momentum can be sustained amid lofty valuations and uncertainties over extra government aid. High-frequency economic indicators and corporate earnings have improved, bolstering optimism on the recovery from a pandemic-induced recession amid ultra-easy monetary policy and massive stimulus.

“The Fed’s largesse means that there are trillions of dollars of excess liquidity sloshing around seeking greater returns than the near zero or even negative rates offered by fixed income,” wrote Win Thin, global head of currency strategy at Brown Brothers Harriman & Co. in New York. “Much of that is going into equities.”

Read: Markets Tell the Fed It’s Finally Getting an Edge on Inflation

Democratic and Republican leaders are hinting that they are looking for a path toward reviving stalled negotiations on the next round of pandemic relief for the U.S. economy, even as both sides remain far from any deal. The Trump administration sees a possibility for Republicans and Democrats to agree on a smaller round of pandemic relief totaling US$500 billion that would omit the biggest areas of disagreement, a senior U.S. official said on Tuesday night.

Boosted by the S&P 500’s surge to a record on Tuesday, the market cap of global equities is at an all-time high of US$89.7 trillion. Risk assets have rallied since March as unprecedented stimulus measures and gains in technology stocks have outweighed concerns about U.S.-China trade tensions and rising coronavirus cases.

These are some of the main moves in markets:

Stocks

The S&P 500 rose 0.1 per cent as of 10:29 a.m. New York time.
The Stoxx Europe 600 Index advanced 0.4 per cent.
The MSCI Asia Pacific Index was little changed.

Currencies

The Bloomberg Dollar Spot Index decreased 0.1 per cent.
The euro increased 0.1 per cent to US$1.1944.
The Japanese yen was little changed at 105.42 per dollar.

Bonds

The yield on 10-year Treasuries dipped one basis point to 0.65 per cent.
Germany’s 10-year yield decreased one basis point to -0.47 per cent.
Britain’s 10-year yield fell less than one basis point to 0.217 per cent.

Commodities

The Bloomberg Commodity Index was little changed.
West Texas Intermediate crude dipped 0.6 per cent to US$42.63 a barrel.
Gold weakened 0.6 per cent to US$1,991.38 an ounce.

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2020-08-19 13:35:07Z
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