Stocks crept higher as traders prepared for a week packed with interest-rate decisions from major central banks. Tesla Inc. was poised for a record winning streak.
The S&P 500 advanced further into bull-market territory amid bets on a Federal Reserve pause after 10 straight rate hikes. Tesla is on course for a 12th day of gains as its electric-car chargers become the industry standard. Cruise operator Carnival Corp. rose after an upgrade from JPMorgan Chase & Co.
A busy calendar for investors kicks off with the US consumer price data on Tuesday and the Fed’s latest policy decision the next day. With the pace of inflation still proving sticky, positioning in rates markets suggests one more hike in July.
“It feels like markets have been underpricing the probability of a June hike,” said Pooja Kumra, senior European rates strategist at Toronto Dominion Bank. “Data is moving in the right direction, but still not where central banks would like inflation to be.”
While the consensus is for the Fed to pause this week, unexpected hikes from the Bank of Canada and the Reserve Bank of Australia have added an extra element of uncertainty to markets. The European Central Bank is projected to lift its benchmark rate Thursday and the Bank of Japan is expected to stand pat on Friday.
Add to that the concerns over growth in China. The People’s Bank of China will have an opportunity to add more monetary stimulus on Thursday, although the majority of economists surveyed by Bloomberg predict no change to rates just yet.
Meanwhile in stocks, Wall Street’s top strategists are giving divergent views on what the S&P 500 will likely do next.
Goldman Sachs strategists expect the gains to continue as other sectors catch up with the searing rally for technology shares. Morgan Stanley’s Michael Wilson, meanwhile, points instead to the example of the bear market of the 1940s, when the S&P 500 rallied 24% before returning to a new low.
Key events this week:
- US CPI, Tuesday
- FOMC begins two-day meeting, Tuesday
- Eurozone industrial production, Wednesday
- US PPI, Wednesday
- FOMC rate decision, Wednesday
- IEA oil market report released, Wednesday
- China central bank meeting to decide on one-year policy loan rate, Thursday
- China property prices, retail sales, industrial production, Thursday
- ECB rate decision, Thursday
- US initial jobless claims, retail sales, empire manufacturing, business inventories, industrial production
- Eurozone CPI, Friday
- Japan BOJ rate decision, Friday
- US University of Michigan consumer sentiment, Friday
Some of the major moves in markets:
Stocks
- The S&P 500 rose 0.3% as of 9:30 a.m. New York time
- The Nasdaq 100 rose 0.3%
- The Dow Jones Industrial Average rose 0.2%
- The Stoxx Europe 600 rose 0.3%
- The MSCI World index rose 0.1%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro rose 0.2% to $1.0766
- The British pound fell 0.2% to $1.2542
- The Japanese yen was little changed at 139.34 per dollar
Cryptocurrencies
- Bitcoin fell 1% to $25,870.74
- Ether fell 1.6% to $1,742.15
Bonds
- The yield on 10-year Treasuries was little changed at 3.73%
- Germany’s 10-year yield declined three basis points to 2.35%
- Britain’s 10-year yield advanced three basis points to 4.27%
Commodities
- West Texas Intermediate crude fell 3.1% to $67.98 a barrel
- Gold futures fell 0.3% to $1,971.70 an ounce
