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London - US stocks churned near record highs as earnings bolstered optimism in the economy before a raft of events that will set the tone on markets in the coming week. The yen declined with Treasuries and gold.
The S&P 500 Index’s pursuit of an all-time high took it within three points of the mark, while European shares advanced after most markets in the region were closed for a holiday.
Treasury yields climbed after Steven Mnuchin said it “could absolutely make sense” for the US to sell ultra-long bonds. The dollar was mixed versus major peers, with the yen retreating to a six-week low. Crude was little changed below $49 a barrel.
With markets vulnerable to jolts, investors may yet be reluctant to commit to any direction. A weaker-than-expected GDP report from the US ahead of Friday’s monthly American jobs report, with the French election result next week is giving them plenty to worry about.
A tentative deal by the US Congress to avert a government shutdown signaled President Donald Trump may have to settle for compromises on his tax-cut plan. The White House’s suggestion it could reintroduce rules that keep commercial and investment banking operations separate whipsawed shares.
“Risk assets are performing well and investors are clearly bullish,” Claudio Piron, strategist at Bank of America Merrill Lynch wrote in a client note. “Nevertheless, we advise caution and this month is especially notorious for its refrain to ’Sell in May’,” he added.
Here are the key events and data releases due this week:
Investors will be watching comments from a policy meeting of the Federal Open Market Committee Wednesday. Voters in France go to the polls on Sunday for the second round of presidential elections.
Besides Apple, other companies on the agenda for earnings this week include BNP Paribas, Facebook, HSBC, Time Warner, Pfizer, Merck & Co, BMW, Royal Dutch Shell and Volkswagen.
Here are the main moves in markets:
Stocks
The S&P 500 added 0.2% to 2 092.26 at 14:31, three points short of its March 1 closing record. The Nasdaq Composite and Nasdaq 100 indexes edged higher after closing at all-time highs.
The MSCI All-Country World Index rose 0.3, poised for a record. The Stoxx Europe 600 Index increased 0.6%, with BP jumping 2% after profit rose to $1.51bn, exceeding analysts’ estimate. The Topix index rose 0.7% to the highest since March 21 as the yen weakened. Japanese markets will be closed for holidays over the next three days.
Currencies
The yen slid 0.4% to 112.27 per dollar, the lowest since March 21, following a 0.3% slide on Monday. The euro rose 0.1% to $1.0914, while the British pound was 0.2% higher. The Bloomberg Dollar Spot Index was little changed.
Bonds
The yield on 10-year Treasuries added two basis points to 2.34% after jumping four basis points Monday, its first advance after three straight declines. Issuing longer-dated bonds “is something we’re considering,” Treasury Secretary Mnuchin said in an interview on Bloomberg Television on Monday. Germany’s 10-year yield rose two basis points to 0.34%.
Commodities
West Texas Intermediate crude rose 0.4% to $49.04, erasing earlier losses. Oil fell 1% on Monday as Libyan output surged, more rigs were added in the US and Saudi Arabia cut prices to Asian customers. Copper on the London Metals Exchange rose 0.9%. Gold declined 0.3% to $1 252.84 an ounce, after dropping 0.9% on Monday.
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