Stocks climb, bonds dip amid Trump tweet barrage - BNN

U.S. stocks rose, clawing back most of the decline triggered by Donald Trump’s suspension of stimulus talks, after the president backed a piecemeal approach to aid and investors took a longer-term view on a spending program. Treasuries and the dollar fell.

The S&P 500 opened higher after a barrage of overnight tweets from the president supporting US$25 billion to hard-hit airlines and US$135 billion for small businesses. The benchmark slumped 1.4 per cent Tuesday when Trump abruptly called off aid talks with Democrats. Stocks had climbed earlier in the day on signs a deal was still possible before the election.

The House & Senate should IMMEDIATELY Approve 25 Billion Dollars for Airline Payroll Support, & 135 Billion Dollars for Paycheck Protection Program for Small Business. Both of these will be fully paid for with unused funds from the Cares Act. Have this money. I will sign now!

— Donald J. Trump (@realDonaldTrump) October 7, 2020

If I am sent a Stand Alone Bill for Stimulus Checks ($1,200), they will go out to our great people IMMEDIATELY. I am ready to sign right now. Are you listening Nancy? @MarkMeadows @senatemajldr @kevinomccarthy @SpeakerPelosi @SenSchumer

— Donald J. Trump (@realDonaldTrump) October 7, 2020

”It is very unlikely that House Democrats would entertain just these measures -- regardless, market action appears to be more driven by the prospects of a blue wave, rather than pre-election stimulus,” said Yousef Abbasi, global market strategist at StoneX.

Investors who’ve watched Democratic challenger Joe Biden’s lead in the polls swell in recent days are now speculating that a victory by him would bring a wave of federal spending to boost the economy. Tech stocks also rose in early trading, even after a House panel’s proposal late Tuesday for stricter antitrust rules to curb the power of Apple Inc., Alphabet Inc., Facebook Inc. and Amazon.com Inc. The four tech giants account for more than 15 per cent of the S&P 500. Eli Lilly and Co. rose after advances on its COVID-19 antibody drug.

Volatility picked up this month after Trump contracted the coronavirus and investors were whipsawed by the ups and down of talks on U.S. economic aid. The standalone measures the president proposed also included US$1,200 aid checks to individuals.

“These tweets appear to have arrested the risk-off move,” analysts including Lyn Graham-Taylor at Rabobank in London wrote in an investor note “However, it seems a stretch to think that the Democrats would be fans of signing any standalone stimulus measures as, heading into the election, it would erode one of the differentiating factors between them and the Republicans.”

The dollar edged lower versus a basket of its peers before Federal Reserve officials comment later on Wednesday and release minutes from their past policy meeting. Oil fell and gold advanced.

Meanwhile, with Trump now out of the hospital, investors continue to monitor the virus’s impact on economic recoveries around the world. Signs are mounting the virus is returning to the New York area, with infections reaching three-month highs.

The European Commission, meantime, is close to a deal to procure more of the COVID-19 treatment remdesivir from Gilead Sciences Inc.

Elsewhere, Gazprom PJSC’s shares fell after it was hit with a 29 billion zloty (US$7.6 billion) fine from Poland’s antitrust watchdog, which said its proposed Nord Stream 2 gas pipeline impedes competition on European Union energy markets.

Satellite broadcaster Sirius XM Holdings Inc. rose in the premarket as star Howard Stern played down reports he was negotiating for $120 million in annual pay.

Here are some key events coming up:

• The minutes of the Sept. 15-16 meeting of the FOMC on Wednesday could be especially fruitful for Fed watchers, beginning with details of the debate on conditions necessary to trigger a rate increase
• The U.S. Vice Presidential debate takes place in Salt Lake City on Wednesday

These are some of the main moves in markets:

Stocks

• The S&P 500 Index rose one per cent to 3,394.58 as of 9:30 a.m. New York time.
• The Dow Jones Industrial Average climbed 1.1 per cent to 28,068.08.
• The Nasdaq Composite Index dipped 1.6 per cent to 11,154.60.
• The Nasdaq 100 Index sank 1.9 per cent to 11,291.27.
• The Stoxx Europe 600 Index fell 0.2 per cent to 365.07, the first retreat in a week and the largest fall in more than a week.

Currencies

• The Bloomberg Dollar Spot Index fell 0.2 per cent to 1,171.83.
• The euro climbed 0.3 per cent to US$1.1772.
• The Japanese yen depreciated 0.3 per cent to 105.93 per dollar, the weakest in almost four weeks.

Bonds

• The yield on 10-year Treasuries climbed four basis points to 0.78 per cent.
• The yield on 30-year Treasuries increased four basis points to 1.58 per cent.
• Germany’s 10-year yield gained one basis point to -0.50 per cent, the highest in almost three weeks.
• Britain’s 10-year yield rose one basis point to 0.299 per cent, the highest in more than five weeks.

Commodities

• West Texas Intermediate crude fell 2.3 per cent to US$39.72 a barrel.
• Gold strengthened 0.5 per cent to US$1,887.27 an ounce.
• Copper climbed 2.4 per cent to US$3.04 a pound, the highest in more than two weeks.

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2020-10-07 13:30:00Z
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