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Stocks Turn Green After Two-Day Slide; Oil Rallies: Markets Wrap

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An electronic stock board outside a securities firm in Tokyo, Japan, on Tuesday, Sept. 7, 2021. The Nikkei 225 Stock Average touched a level above 30,000 for the first time since April as a reshuffle of the blue-chip gauge added to a wave of positive sentiment on Japanese equities. Photographer: Soichiro Koriyama/Bloomberg
An electronic stock board outside a securities firm in Tokyo, Japan, on Tuesday, Sept. 7, 2021. The Nikkei 225 Stock Average touched a level above 30,000 for the first time since April as a reshuffle of the blue-chip gauge added to a wave of positive sentiment on Japanese equities. Photographer: Soichiro Koriyama/Bloomberg

Stocks rebounded after a two-day drop, with energy shares joining a rally in oil.

The S&P 500 erased losses, but was still poised for a weekly slide. Another rise in Treasury yields weighed on the tech space, with the Nasdaq 100 underperforming major equity benchmarks. Crude gained as Russia plans to cut its oil output by 500,000 barrels a day next month, following through on a threat to retaliate against western energy sanctions and sending oil prices sharply higher.

Data Friday showed that US consumer sentiment climbed to a more than one-year high in early February as more upbeat views of current conditions outweighed lingering concerns about the outlook.

Next week’s US inflation data will mark a turning point for this year’s equity rally at a time when investors are swapping stocks for bonds amid the specter of a recession, according to Bank of America Corp. strategists.

Global equity funds had outflows of $7.4 billion in the week through Feb. 8, according to a note from the bank that cited EPFR Global data. Cash funds also saw redemptions at $10.1 billion, while $7.4 billion entered bonds.

In corporate news, Lyft Inc. headed for its biggest single-day decline ever after forecasting dramatically lower profits than expected and saying it will cut prices in an attempt to attract and keep customers. Expedia Group Inc. executives gave an optimistic outlook for travel demand in the current quarter, reassuring investors after the company’s fourth-quarter results were weaker than expected.

The yen strengthened as much as 1.4% against the dollar after news reports that Kazuo Ueda would be picked to become the Bank of Japan’s next governor.  Investors initially interpreted the decision as likely a hawkish choice. Those gains were trimmed after Ueda spoke to reporters and said the BOJ’s stimulus should stay in place. 

“Why do we care? Because the BOJ is locked into ultra-dovish policy,” said Chris Low at FHN Financial. “It is the only major central bank fighting to keep inflation high rather than trying to lower it. Now we’ll have to see how long he sticks to the old policy.”

“Earnings by and large have held up better than expected,” Hank Smith, Haverford Trust’s head of investment strategy, says. Speaking during an interview on “BloombergMarkets: The Close,” Smith also discusses where he is seeing investment opportunities emerging in the equity market.
“Earnings by and large have held up better than expected,” Hank Smith, Haverford Trust’s head of investment strategy, says. Speaking during an interview on “BloombergMarkets: The Close,” Smith also discusses where he is seeing investment opportunities emerging in the equity market.

Some of the main moves in markets:

Stocks

  • The S&P 500 was little changed as of 10:14 a.m. New York time
  • The Nasdaq 100 fell 0.3%
  • The Dow Jones Industrial Average rose 0.2%
  • The Stoxx Europe 600 fell 1%
  • The MSCI World index fell 0.4%

Currencies

  • The Bloomberg Dollar Spot Index was little changed
  • The euro fell 0.4% to $1.0702
  • The British pound was little changed at $1.2113
  • The Japanese yen rose 0.3% to 131.19 per dollar

Cryptocurrencies

  • Bitcoin rose 0.1% to $21,882.59
  • Ether rose 0.3% to $1,545.64

Bonds

  • The yield on 10-year Treasuries advanced three basis points to 3.69%
  • Germany’s 10-year yield advanced six basis points to 2.37%
  • Britain’s 10-year yield advanced seven basis points to 3.36%

Commodities

  • West Texas Intermediate crude rose 1.3% to $79.11 a barrel
  • Gold futures fell 0.1% to $1,876.30 an ounce

This story was produced with the assistance of Bloomberg Automation.

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