Stocks Rise on Luxury Earnings; Rand at Record Low: Markets Wrap

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 progress 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.

Meanwhile, South Africa’s rand sank 1.6% against the dollar to the lowest level on record. President Cyril Ramaphosa is starting an investigation into allegations that the country supplied weapons and ammunition to Russia.

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 was steady, poised for its biggest weekly gain since March. Treasury yields ticked higher. 

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. 

 

 

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

  • The Stoxx Europe 600 rose 0.7% as of 10:08 a.m. London time
  • S&P 500 futures rose 0.5%
  • Nasdaq 100 futures rose 0.3%
  • Futures on the Dow Jones Industrial Average rose 0.5%
  • The MSCI Asia Pacific Index fell 0.2%
  • The MSCI Emerging Markets Index fell 0.4%

Currencies

  • The Bloomberg Dollar Spot Index was little changed
  • The euro was little changed at $1.0914
  • The Japanese yen fell 0.2% to 134.74 per dollar
  • The offshore yuan was little changed at 6.9575 per dollar
  • The British pound rose 0.2% to $1.2530

Cryptocurrencies

  • Bitcoin fell 2.5% to $26,321.24
  • Ether fell 1.8% to $1,764.61

Bonds

  • The yield on 10-year Treasuries advanced three basis points to 3.41%
  • Germany’s 10-year yield advanced two basis points to 2.24%
  • Britain’s 10-year yield advanced two basis points to 3.73%

Commodities

  • Brent crude fell 0.5% to $74.59 a barrel
  • Spot gold fell 0.5% to $2,005.68 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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