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Nuri
al-Maliki, Iraq's prime minister, right, and John Kerry, U.S. Secretary
of State, meet at the Prime Minister's Office in Baghdad, on June 23,
2014.
U.S. Stocks Rise With Treasuries While Europe Pares Loss
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Nuri al-Maliki, Iraq's prime minister, right, and John Kerry, U.S. Secretary of State,... Read More
U.S. equities rose with Treasuries
as new-home sales rose by the most in 22 years. European shares
pared declines while emerging markets rebounded on easing
tension in Ukraine.
The Standard & Poor’s 500 Index rose 0.3 percent at 11:03 a.m. in New York. The Stoxx Europe 600 Index slid 0.1 percent, trimming an earlier drop of 0.4 percent. Treasury 10-year yields fell two basis point to 2.61 percent. The MSCI Emerging Markets Index climbed 0.7 percent. Dubai’s benchmark gauge tumbled 6.7 percent after entering a bear market yesterday. The pound depreciated against 14 of its 16 major peers after Bank of England Governor Mark Carney said wage data had been softer than expected.
Purchases of new U.S. homes rose more than economists forecast in May, while consumer confidence increased this month. Federal Reserve Bank of Philadelphia President Charles Plosser said he’s “fairly optimistic” growth will top 2.4 percent for the remainder of this year and next. German business confidence dropped more than estimated in June amid signs of slower growth. Russian President Vladimir Putin asked lawmakers to cancel the right to use force in Ukraine.
“The main reason for the turnaround has to do with the upside surprise on the housing data,” Kevin Caron, portfolio manager at Stifel Nicolaus & Co. in Florham Park, New Jersey. His firm manages about $170 billion. “You’ve seen relatively light volume and still very low volatility. You’re seeing a market has become more comfortable as it relates to risk. Central banks have been providing stability where needed.”
The S&P 500 is up 8.4 percent since a low on April 11 as data showed the economy is recovering from extreme weather and the first drop in first-quarter gross domestic product since 2011. The government’s third revision to the GDP reading, due tomorrow, is expected to show a contraction of 1.8 percent, according to a Bloomberg survey of economists.
Plosser and his colleagues on the Federal Open Market Committee on June 18 trimmed bond buying by $10 billion for the fifth straight meeting, to $35 billion per month, while reiterating that they plan to keep the main rate close to zero for a “considerable time” after ending the purchases. “The inflation rate appears to be firming,” Plosser said, predicting it will “stabilize” next year at about 2 percent, which is the FOMC’s target.
Chair Janet Yellen, speaking at a news conference after the FOMC decision, dismissed concern about accelerating inflation, calling recent data on prices “noise.”
The Conference Board’s index of U.S. consumer confidence increased to 85.2 in June from 82.2 a month earlier, the New York-based private research group said today. The median projection in a Bloomberg survey of 70 economists called for a reading of 83.5 in June.
The U.S. equities market is experiencing its smallest swings of the year. The S&P 500 moved 0.25 percentage point from its highest and lowest levels yesterday. That followed a swing of 0.24 point on June 20, the narrowest movement in more than 20 years besides a 0.20 point reading in December. The Chicago Board Options Exchange Volatility Index, or VIX (VIX), a measure of S&P 500 options prices, fell 0.1 percent to 10.97 today, near its lowest level since 2007.
“The fall in the Ifo is a signal that the eurozone’s growth engine is slowing down,” said Witold Bahrke, who helps oversee $55 billion as a senior strategist at PFA Asset Management in Copenhagen. “German businesses as of now are quite unimpressed by measures taken by the European Central Bank.”
The euro area is struggling to sustain a recovery that received a bleak assessment from the International Monetary Fund June 20. Earlier this month, the European Central Bank introduced a negative deposit rate, announced targeted loans to stimulate lending and held out the prospect of asset purchases to stoke growth and inflation in the 18-nation region.
Dubai stocks tumbled as turmoil at the United Arab Emirates’ largest-listed builder, Arabtec Holding Co., prompted the biggest selloff since August. Arabtec dropped 9.8 percent to the lowest since February after the company confirmed it cut staff.
The ruble gained as much as 1.2 percent to the strongest level against the dollar since January, and the Micex Index of stocks jumped 2.2 percent.
Putin asked the upper house of parliament to rescind approval granted March 1 to use force in Ukraine, Kremlin spokesman Dmitry Peskov said by phone. Pro-Russian forces in Ukraine called a cease-fire in fighting against government forces, matching a truce announcement made earlier by President Petro Poroshenko.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Joseph Ciolli in New York at jciolli@bloomberg.net
To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net; Stuart Wallace at swallace6@bloomberg.net Jeff Sutherland
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The Standard & Poor’s 500 Index rose 0.3 percent at 11:03 a.m. in New York. The Stoxx Europe 600 Index slid 0.1 percent, trimming an earlier drop of 0.4 percent. Treasury 10-year yields fell two basis point to 2.61 percent. The MSCI Emerging Markets Index climbed 0.7 percent. Dubai’s benchmark gauge tumbled 6.7 percent after entering a bear market yesterday. The pound depreciated against 14 of its 16 major peers after Bank of England Governor Mark Carney said wage data had been softer than expected.
Purchases of new U.S. homes rose more than economists forecast in May, while consumer confidence increased this month. Federal Reserve Bank of Philadelphia President Charles Plosser said he’s “fairly optimistic” growth will top 2.4 percent for the remainder of this year and next. German business confidence dropped more than estimated in June amid signs of slower growth. Russian President Vladimir Putin asked lawmakers to cancel the right to use force in Ukraine.
“The main reason for the turnaround has to do with the upside surprise on the housing data,” Kevin Caron, portfolio manager at Stifel Nicolaus & Co. in Florham Park, New Jersey. His firm manages about $170 billion. “You’ve seen relatively light volume and still very low volatility. You’re seeing a market has become more comfortable as it relates to risk. Central banks have been providing stability where needed.”
The S&P 500 is up 8.4 percent since a low on April 11 as data showed the economy is recovering from extreme weather and the first drop in first-quarter gross domestic product since 2011. The government’s third revision to the GDP reading, due tomorrow, is expected to show a contraction of 1.8 percent, according to a Bloomberg survey of economists.
Economic Growth
Economic expansion will probably slow to a 2.4 percent trend rate after 2015, Plosser, who votes on monetary policy this year, said today in remarks prepared for a speech to the Economic Club of New York.Plosser and his colleagues on the Federal Open Market Committee on June 18 trimmed bond buying by $10 billion for the fifth straight meeting, to $35 billion per month, while reiterating that they plan to keep the main rate close to zero for a “considerable time” after ending the purchases. “The inflation rate appears to be firming,” Plosser said, predicting it will “stabilize” next year at about 2 percent, which is the FOMC’s target.
Chair Janet Yellen, speaking at a news conference after the FOMC decision, dismissed concern about accelerating inflation, calling recent data on prices “noise.”
Home Sales
Sales of new homes increased 18.6 percent, the biggest one-month gain since January 1992, to a 504,000 annualized pace, figures from the Commerce Department showed. Home prices in 20 U.S. cities rose at a slower pace than forecast in the year ended in April, according to the S&P/Case-Shiller index of property values.The Conference Board’s index of U.S. consumer confidence increased to 85.2 in June from 82.2 a month earlier, the New York-based private research group said today. The median projection in a Bloomberg survey of 70 economists called for a reading of 83.5 in June.
The U.S. equities market is experiencing its smallest swings of the year. The S&P 500 moved 0.25 percentage point from its highest and lowest levels yesterday. That followed a swing of 0.24 point on June 20, the narrowest movement in more than 20 years besides a 0.20 point reading in December. The Chicago Board Options Exchange Volatility Index, or VIX (VIX), a measure of S&P 500 options prices, fell 0.1 percent to 10.97 today, near its lowest level since 2007.
German Confidence
Stocks slumped earlier as German business confidence fell to the weakest level this year. The Ifo institute’s business climate index, based on a survey of 7,000 executives, declined to 109.7 in June from 110.4 in May. Economists predicted a drop to 110.3, according to the median of 40 estimates in a Bloomberg News survey.“The fall in the Ifo is a signal that the eurozone’s growth engine is slowing down,” said Witold Bahrke, who helps oversee $55 billion as a senior strategist at PFA Asset Management in Copenhagen. “German businesses as of now are quite unimpressed by measures taken by the European Central Bank.”
The euro area is struggling to sustain a recovery that received a bleak assessment from the International Monetary Fund June 20. Earlier this month, the European Central Bank introduced a negative deposit rate, announced targeted loans to stimulate lending and held out the prospect of asset purchases to stoke growth and inflation in the 18-nation region.
Croda, Syngenta
Croda International Plc (CRDA) lost 8.9 percent today after the world’s second-largest supplier of cosmetic ingredients lowered its profit outlook. Altice SA fell 3.9 percent as cable billionaire Patrick Drahi’s investment company sold about $1.2 billion of new stock. Syngenta AG jumped 6.1 percent after people familiar with the matter said Monsanto Co. recently explored a takeover of the Swiss crop-chemicals maker.Dubai stocks tumbled as turmoil at the United Arab Emirates’ largest-listed builder, Arabtec Holding Co., prompted the biggest selloff since August. Arabtec dropped 9.8 percent to the lowest since February after the company confirmed it cut staff.
The ruble gained as much as 1.2 percent to the strongest level against the dollar since January, and the Micex Index of stocks jumped 2.2 percent.
Putin asked the upper house of parliament to rescind approval granted March 1 to use force in Ukraine, Kremlin spokesman Dmitry Peskov said by phone. Pro-Russian forces in Ukraine called a cease-fire in fighting against government forces, matching a truce announcement made earlier by President Petro Poroshenko.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Joseph Ciolli in New York at jciolli@bloomberg.net
To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net; Stuart Wallace at swallace6@bloomberg.net Jeff Sutherland
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