Dubai - US stocks fluctuated near all-time highs, while Europe’s common currency weakened following a convincing defeat of populism in France’s presidential election that investors had already priced in. Crude fluctuated even as Saudi Arabia and Russia signaled output cuts will be extended.
The S&P 500 Index struggled to add to its first closing record since March 1. The euro fell after climbing for five of the past six days in the buildup to the election of Emmanuel Macron.
Commodities producers sank the Stoxx Europe 600 Index after recent raw materials declines. The dollar gained with Treasuries. Oil fluctuated near $46 a barrel, despite the Saudi oil minister saying OPEC’s supply cuts will be extended.
Macron’s decisive triumph over the anti-euro Marine Le Pen will strengthen the EU and deal a blow to the populist wave that has roiled western democracies for the past year. But there was little room for a relief rally - focus now shifts to the challenges facing the incoming president, while there had already been gains in the buildup to Sunday’s vote.
Global stocks are trading at the highest ever, and US equities also closed at a record last week after better-than-forecast data on American jobs.
“Damp squib would be an overstatement,” Kit Juckes, a global strategist at Societe Generale, wrote in a note about the euro’s reaction. The common currency faces headwinds after moving further than bonds in recent days, and because data shows investors still shorting the euro, he said. “A period of choppy trading is likely for now, but we do still expect the euro to move higher in due course,” he wrote.
With the hurdle determining France’s new leader now cleared, investors will also turn their attention to global growth and corporate earnings after last week’s robust American jobs report and Federal Reserve comments bolstered optimism in the US economy.
Here’s what investors will be watching this week:
The annual Sohn Investment Conference is held in New York City, where top Wall Street investors including David Einhorn and Bill Ackman will share their insights with portfolio managers, asset allocators and private investors.
Fed official Loretta Mester speaks on the US economy in Chicago and James Bullard participates in a panel discussion in Atlanta on Monday.
South Korea heads to the polls on Tuesday to elect a new president following the ouster of Park Geun-hye in a corruption scandal. Earnings this week include results from Walt Disney, Mitsubishi, Toyota and Deutsche Telekom.
Here are the main moves in markets:
Stocks
The S&P 500 was little changed at 2 400 as of 14:31. The benchmark gauge climbed 0.6% last week, closing on Friday at an all-time high. It’s intraday record is 2 400.98, set March 1. The Stoxx Europe 600 slipped 0.2%, dragged down by miners. Emerging-market shares jumped 0.6%.
Currencies
The euro fell 0.5% to $1.0944, after gaining as much as 0.2% earlier. The currency has been trading near the highest level since November. The Bloomberg Dollar Spot Index advanced 0.3% following four straight weeks of declines.
Bonds
The yield on 10-year Treasury notes decreased two basis points to 2.33%. French benchmark yields fell three basis points to 0.81% while German equivalents dropped two basis points to 0.39%.
Commodities
West Texas Intermediate fluctuated before rising 0.3% to $46.36 a barrel. Gold futures climbed 0.3% to $1 230.30 an ounce.
Asia
Japan’s Topix soared 2.3% to the highest since December 2015 as investors played catch-up after a three-day holiday. South Korea’s Kospi jumped 2.3% to a fresh record ahead of Tuesday’s election. A selloff in China continued, with the Shanghai Composite Index dropping 0.8% to the lowest level since October, despite data showing overseas shipments held up in April.
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