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Tech Shares Lead Gains Before Earnings; Oil Rises: Markets Wrap

Sarah Ponczek and Vildana Hajric
Tech Shares Lead Gains Before Earnings; Oil Rises: Markets Wrap

(Bloomberg) -- Technology shares led gains among U.S. stocks following mixed sessions in Europe and Asia as investors looked ahead to a busy week of corporate earnings. Oil gained amid tensions in the Persian Gulf.

Apple rallied after Morgan Stanley boosted its price target, while Micron Technology was lifted to buy from neutral by Goldman, as were Lam Research and Applied Materials. The Dow Jones Industrial Average was little changed. Stocks slipped throughout Asia, led by declines in Shanghai and Hong Kong as traders watched escalating tensions there. Treasuries advanced after traders pared bets the Federal Reserve will slash rates by a half-point this month.

“We will start to get results from some of the big multi-national industrials and tech firms, which should shed more light on the effects of the trade war and therefore could move markets on a broad scale,” Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter, wrote in a note to clients.

Oil rose again, posting its biggest gain in more than a week, after Iran’s seizure of a British tanker fanned concerns of a confrontation that could disrupt Middle East supplies.

Investors will be eyeing earnings this week for signs of economic slowdown and any indication that trade strife is affecting companies’ bottom lines. On the trade front, Chinese state media reported face-to-face negotiations with the U.S. may resume soon, as Beijing considers a plan to boost American soybean purchases to sweeten a deal, people familiar with the matter said.

“It’s nice to see it’s restarting,” said Michael Kelly, global head of multi-asset at PineBridge Investments, which manages more than $90 billion. “I think it will provide plenty of room for both sides to get something and for us to avoid the worst case of tariffs on another $300 billion.”

Elsewhere, core European government bonds gained, while the pound slumped after a forecast showed Brexit may have already pushed the U.K. into a technical recession, and as Conservative Party members vote on new leadership.

Here are some key events coming up:

Earnings season rolls on with companies including: Amazon.com, Alphabet, Unilever, Caterpillar, Coca-Cola, McDonald’s and Boeing.U.K. Prime Minister Theresa May’s successor is announced on Tuesday, with Boris Johnson expected to become the new Conservative leader and PM.Thursday brings the European Central Bank policy decision. Economists widely expect officials to signal their readiness to cut interest rates and potentially broaden stimulus. Some see the chance of an immediate rate cut. ECB President Mario Draghi holds a briefing afterward.

These are the main moves in markets:

Stocks

The S&P 500 Index rose 0.3% as of 4:03 p.m. New York time. The Nasdaq Composite Index gained 0.7% and the Dow Jones Industrial Average less than 0.1%.The Stoxx Europe 600 rose 0.1%.The MSCI Emerging Market Index eased 0.4%.The MSCI Asia Pacific Index dropped 0.5%.

Currencies

The Bloomberg Dollar Spot Index rose 0.1%, the second consecutive gain.The euro was little changed at $1.1209, while the yen weakened 0.2% to 107.88 per dollar. The British pound fell 0.2% to $1.2476.The MSCI Emerging Markets Currency Index was little changed.

Bonds

The yield on 10-year Treasuries eased 1 basis point to 2.05%.Germany’s 10-year yield dropped 2 basis points to -0.35%, the fourth straight decline.Britain’s 10-year yield fell 3 basis points to 0.71%.

Commodities

West Texas Intermediate rose 1.1% to $56.22 a barrel. Gold was little changed at $1,425 an ounce. The Bloomberg Commodity Index fell 0.3%.

--With assistance from Laura Curtis.

To contact the reporters on this story: Sarah Ponczek in New York at sponczek2@bloomberg.net;Vildana Hajric in New York at vhajric1@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave Liedtka

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