US equities struggled to find direction ahead of the minutes from the Federal Reserve. Bonds were mixed.
(Bloomberg) — US equities struggled to find direction ahead of the minutes from the Federal Reserve. Bonds were mixed.
The S&P 500 edged higher while the the tech-heavy Nasdaq 100 inched down. Target Corp. jumped on a strong profit rebound at the retailer, while Tesla Inc.’s stock fell after the carmaker’s second round of price cuts in China this week.
US Treasuries were mixed as benchmark 10-year Treasuries hovering around 4.2%, shorter notes traded stronger. Traders are closely watching the minutes of the July FOMC meeting due to be released later Wednesday.
“With a softer payrolls and inflation read revealed since the meeting, expect that the odds of a September hike will continue to wane,” said Ian Lyngen, a strategist with BMO Capital Markets. Still, he added “a willingness to continue tightening if needed will leave the door firmly open for another hike if the data warrants.”
The pound strengthened as UK inflation topped expectations. But China’s economic woes continue to weigh on markets, despite a slew of stimulus steps by authorities. The onshore yuan sank toward its weakest in 16 years against the dollar while the yen fell to a level that triggered Japan’s intervention in September.
Hot wage figures and US retail statistics rattled markets on Tuesday, spurring bets tight central bank policy will be in place for longer. Minneapolis Fed President Neel Kashkari warned that inflation was “still too high.”
In China, the central bank moved to boost fragile sentiment with a stronger-than-expected reference rate for the yuan and the largest injection of short term cash to the financial system since February. So far the steps have failed to restore optimism and market moves suggest traders are looking for more aggressive supportive measures.
Corporate Highlights:
- Intel Corp.’s $5.4 billion deal with Israel’s Tower Semiconductor Ltd. collapses after failing to win Chinese regulatory approval in time.
- Energy Transfer LP will buy Crestwood Equity Partners LP in a $7.1 billion all-equity deal allowing Energy Transfer to expand its US pipeline network.
- Target Corp. climbs after a surprising profit surge in the second quarter overshadows the company’s increasingly cautious outlook on the rest of the year.
Key events this week
- US FOMC minutes, housing starts, industrial production, Wednesday
- US initial jobless claims, US Conf. Board leading index, Thursday
- Eurozone CPI, Friday
Some of the main moves in markets:
Stocks
- The S&P 500 rose 0.1% as of 9:40 a.m. New York time
- The Nasdaq 100 was little changed
- The Dow Jones Industrial Average rose 0.4%
- The Stoxx Europe 600 was little changed
- The MSCI World index fell 0.2%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro rose 0.1% to $1.0916
- The British pound rose 0.3% to $1.2746
- The Japanese yen fell 0.1% to 145.76 per dollar
Cryptocurrencies
- Bitcoin fell 0.3% to $29,070.48
- Ether fell 0.5% to $1,819.1
Bonds
- The yield on 10-year Treasuries was little changed at 4.21%
- Germany’s 10-year yield declined one basis point to 2.66%
- Britain’s 10-year yield advanced three basis points to 4.62%
Commodities
- West Texas Intermediate crude was little changed
- Gold futures were little changed
This story was produced with the assistance of Bloomberg Automation.
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