(Bloomberg) — Stocks moved broadly higher as investors looked for progress in Washington debt-ceiling talks and cheered a bout of M&A news.
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The Stoxx 600 climbed 0.2%, lead by consumer and resource shares. Contracts on the S&P 500 rose by about 0.3%, suggesting stocks will continue to trade in their recent narrow range. President Joe Biden, House Speaker Kevin McCarthy and other congressional leaders are planning to meet on Tuesday.
Turkish stocks slumped as the country’s presidential election looked set for a runoff vote in two weeks, with the benchmark index dropping more than 6% before triggering a circuit breaker that halted trading.
The lira was slightly weaker, falling 0.4%. State banks earlier intervened to support the exchange rate, according to people familiar with the matter. European stocks with Turkey exposure declined, with Spain’s Banco Bilbao Vizcaya Argentaria SA down 3.5%.
Away from Turkey, investors continue to track progress in Washington debt-ceiling talks, which haven’t yet removed the risk of a first-ever US default. Treasury Secretary Janet Yellen has said the department may run out of money as soon as June 1, or in the weeks after that.
“When you look from afar in Europe at American politcs right now it is difficult to see how they get to common ground, but the alternative is so bad maybe it forces that grounds to be found,” said Luke Hickmore, investment director at Abrdn. “The risks are still there for sure.”
Meanwhile, hawkish comments from Federal Reserve officials have added to unease among investors over the prospects for relief from the Fed’s interest-rate hiking campaign.
A measure of dollar strength slipped, with Treasuries fractionally lower.
Gold giant Newmont Corp. secured a A$28.8 billion ($19.2 billion) deal to buy Australian rival Newcrest Mining Ltd., consolidating its position as the world’s biggest bullion producer. The deal is the gold mining sector’s largest to date.
US inflation concerns ratcheted higher Friday, with a preliminary University of Michigan sentiment survey showing five-year expectations for consumer-price gains jumped to a 12-year high.
“There’s quite a fair bit of ongoing risk in the market,” Audrey Goh, senior cross asset strategist at Standard Chartered Wealth Management Group, said in an interview on Bloomberg Television. “The debt-ceiling talks are still in the making, at the same time we’ve also got inflation still quite elevated. There could be further downside from here where equity markets are concerned.”
Inflation is still too high, Chicago Fed President Austan Goolsbee said in a PBS interview. “You don’t want to land the plane nose down. So we’re trying to balance off — can we slow the inflation without sending it into a recession.”
Elsewhere in emerging markets, the rand rallied after South Africa moved to ease tensions with the US and the Thai baht climbed as pro-democracy parties got the most votes in weekend elections.
China kept its medium-term lending facility at 2.75%, as economists had forecast, while injecting more long-term liquidity into the financial system for the sixth month in a bid to bolster growth when multiple economic indicators revealed faltering recovery momentum.
In commodities, oil fell for a fourth day as the outlook for demand was damped by worries over the US economy and China’s slower-than-expected recovery. Gold was marginally higher and iron ore rose above $100 a ton as inventories kept declining.
Wheat advanced on supply concerns stemming from a prolonged drought on the US Plains and uncertainty over the future of Black Sea trade from Ukrainian ports.
Key events this week:
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Eurozone industrial production, Monday
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US cross-border investment, New York Fed Empire Manufacturing, Monday
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Atlanta Fed’s Raphael Bostic speaks at his bank’s annual financial markets conference, Monday
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China retail sales, industrial production, Tuesday
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US retail sales, industrial production, business inventories, Tuesday
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Fed speakers include Cleveland’s Loretta Mester, New York’s John Williams, Atlanta’s Raphael Bostic and Chicago’s Austan Goolsbee, Tuesday
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Japan GDP, Wednesday
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Eurozone CPI, Wednesday
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US housing starts, Wednesday
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BOE Governor Andrew Bailey speaks at the British Chamber of Commerce, Wednesday
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US initial jobless claims, Conference Board leading index, existing home sales, Thursday
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Japan CPI, Friday
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ECB President Christine Lagarde participates in panel at Brazil central bank conference, Friday
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New York Fed’s John Williams speaks at monetary policy research conference in Washington, and Fed Chair Jerome Powell and former chair Ben Bernanke to take part in panel discussion, Friday
Some of the main moves in markets:
Stocks
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The Stoxx Europe 600 rose 0.3% as of 8:38 a.m. London time
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S&P 500 futures rose 0.3%
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Nasdaq 100 futures rose 0.2%
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Futures on the Dow Jones Industrial Average rose 0.3%
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The MSCI Asia Pacific Index rose 0.6%
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The MSCI Emerging Markets Index rose 0.5%
Currencies
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The Bloomberg Dollar Spot Index fell 0.1%
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The euro rose 0.2% to $1.0876
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The Japanese yen fell 0.2% to 135.95 per dollar
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The offshore yuan rose 0.2% to 6.9601 per dollar
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The British pound rose 0.2% to $1.2488
Cryptocurrencies
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Bitcoin rose 1.9% to $27,451.74
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Ether rose 1.8% to $1,830.77
Bonds
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The yield on 10-year Treasuries advanced two basis points to 3.48%
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Germany’s 10-year yield advanced three basis points to 2.31%
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Britain’s 10-year yield advanced four basis points to 3.81%
Commodities
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Brent crude fell 0.3% to $73.95 a barrel
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Spot gold rose 0.4% to $2,018.59 an ounce
This story was produced with the assistance of Bloomberg Automation.
—With assistance from Peyton Forte, Richard Henderson and Lynn Thomasson.
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