Stocks rose as investors found confidence in strong earnings from Cartier maker Richemont and signs that US lawmakers are making progress on a deal to raise the debt-ceiling.
(Bloomberg) — Stocks rose as investors found confidence in strong earnings from Cartier maker Richemont and signs that US lawmakers are making progress on a deal to raise the debt-ceiling.
Richemont gained 7.8% to a record, fueling a broad rally across European luxury stocks. S&P 500 futures traded higher after President Joe Biden and House Speaker Kevin McCarthy postponed a meeting on the debt ceiling that was planned for Friday. The delay reflects headway in staff-level discussions, according to people familiar with the talks.
“We believe that they will find a deal — we need to remember negotiations have only just started,” said Marie Jacot-Cardoen, chief executive officer of Edmond de Rothschild Asset Management France, on Bloomberg Television. “It is likely political antagonism will increase before deal is reached, but we believe a compromise will be found.”
Globally, stock markets have seesawed this week on mixed US economic data and ongoing worries about the debt ceiling. While tech stocks have continued to outperform, with the Nasdaq 100 Index climbing 1% so far this week, there’s plenty of skepticism about the industry.
Bank of America Corp. strategists led by Michael Hartnett wrote in a note on Friday that a recession will “crack credit and tech” just as it did in 2008.
Investors remain focused on what major central banks will do next in their rate-hiking campaigns to quell inflation. US data Thursday showed initial jobless claims reached the highest since October 2021 while producer prices rose less than economists expected, suggesting Federal Reserve policy tightening may finally be having an effect.
“There’s a chink of light — inflation is beginning to show some signs of easing, boosting hopes the Fed’s rate hiking cycle is near an end and this means companies can start prioritizing growth, rather than servicing debt,” said Angeline Ong, a financial analyst at IG Group.
The dollar edged higher, poised for its biggest weekly gain since March. Treasury yields mostly ticked higher.
Meanwhile, South Africa’s rand sank as much as 1.6% against the dollar to the lowest level on record, before recovering. President Cyril Ramaphosa is starting an investigation into allegations that the country supplied weapons and ammunition to Russia.
Elsewhere in emerging markets, attention is turning to Turkey’s elections Sunday. Banking stocks have rallied in Istanbul, heading for their best weekly performance since 2002, when incumbent President Recep Tayyip Erdogan’s Ak Party rose to power. Some investors expect the opposition to restore more orthodox monetary policy should it gain power.
In other corporate news, THG Plc shares fell as much as 23% after the company ended talks with Apollo Global Management Inc. in the latest failed takeover attempt of the struggling UK online retailer.
Tesla Inc. gained in US premarket trading after the electric-car maker raised prices of its Model X and Model S cars in the US, the third change in less than a month. The company also said it is recalling virtually every car it’s sold in China due to a braking and acceleration defect. Fox Corp. fell as Wells Fargo Securities cut the recommendation on the media company’s stock to equal-weight from overweight, saying there’s some strategic uncertainty ahead.
Key events this week:
- US University of Michigan consumer sentiment, Friday
- Fed Governor Philip Jefferson and St. Louis Fed President James Bullard participate in panel discussion on monetary policy at Stanford University, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.4% as of 7:05 a.m. New York time
- Nasdaq 100 futures rose 0.2%
- Futures on the Dow Jones Industrial Average rose 0.4%
- The Stoxx Europe 600 rose 0.5%
- The MSCI World index was little changed
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro fell 0.1% to $1.0903
- The British pound rose 0.2% to $1.2534
- The Japanese yen fell 0.1% to 134.71 per dollar
Cryptocurrencies
- Bitcoin fell 2.3% to $26,385.54
- Ether fell 1.6% to $1,766.93
Bonds
- The yield on 10-year Treasuries advanced three basis points to 3.41%
- Germany’s 10-year yield advanced three basis points to 2.25%
- Britain’s 10-year yield advanced four basis points to 3.74%
Commodities
- West Texas Intermediate crude rose 0.2% to $71.03 a barrel
- Gold futures fell 0.5% to $2,011.10 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Richard Henderson, Allegra Catelli and Anchalee Worrachate.
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