Stocks Get AI Boost to Kick Off Central-Bank Week: Markets Wrap

Tech giants led gains in stocks at the start of a week that will bring a raft of central-bank decisions from the US to England and Japan.

The megacap space outpaced the broader market on Monday. Alphabet Inc. jumped as Bloomberg News reported Apple Inc. is in talks to build Google’s Gemini artificial-intelligence engine into the iPhone. Just hours away from Nvidia Corp.’s AI conference — and chief Jensen Huang’s keynote — expectations are high for the chipmaker to deliver news that will sustain its blistering rally.

Investors may glean more on the Federal Reserve’s resolve to ease and how close Japan is to finally exiting negative interest rates as central banks set policy for almost half the global economy. The coming week features the world’s biggest agglomeration of decisions for 2024 to date, including judgments on the cost of borrowing for six of the 10 most-traded currencies.

“It’s a jam-packed week of central bank meetings,” said Win Thin and Elias Haddad at Brown Brothers Harriman. “There are sure to be some surprises and so today’s calm is likely to give way to greater volatility ahead.”

The S&P 500 halted a three-day slide, while the Nasdaq 100 climbed about 1.5%. Treasury 10-year yields advanced one basis point to 4.32%. The dollar was little changed. Nasdaq Inc. said it has resolved a technology glitch that disrupted premarket trading for almost three hours.

Besides AI optimism, equities have rallied on signs of a resilient economy.

Goldman Sachs Group Inc. raised its projections for US economic and jobs growth for this year to account for a faster pace of immigration. Goldman now sees US gross domestic product increasing by 2.4% year-on-year in the fourth quarter, marking a 0.3 percentage-point upgrade on the previous forecast, mostly based on higher consumption.

Against the backdrop of strong growth and a jump in prices in January and February, Fed officials have repeatedly emphasized they’re in no rush to ease.

Bond yields are approaching a key level that could potentially disrupt the equity rally, according to Morgan Stanley strategists.

“We view 4.35% on the 10-year US Treasury yield as an important technical level to watch for signs that rate sensitivity may increase for equities,” a team led by Michael Wilson wrote in a note.

In earnings, FedEx Corp.’s outlook on Thursday will provide hints on the state of the US economy after the bellwether previously forecast a slight revenue decline this fiscal year because of “volatile macroeconomic conditions.”

Nike Inc., Lululemon Athletica Inc., General Mills Inc., and Darden Restaurants Inc. results will show whether consumers are pulling back on spending or trading down, especially with inflation hanging around.

Corporate Highlights:

• Fisker Inc. is pausing production for the next six weeks as the electric-vehicle maker looks to rein in inventory and avoid possibly having to file for bankruptcy.
• B. Riley Financial Inc., the boutique investment bank under attack from short sellers about its dealings with a former business partner, failed to file its audited results after an extension period ended.
• The head of United Airlines Holdings Inc. told customers that the carrier is reviewing a series of recent mishaps involving its planes, promising any lessons learned would “inform our safety training and procedures” across the company.
• Barclays Plc is seeking to expand its relationships with sovereign wealth funds and private equity giants as part of its efforts to improve the profitability of its investment banking division by expanding in advisory and equity underwriting.
• Encyclopaedia Britannica Inc., the education technology company and publisher of books including the Merriam-Webster dictionary, is seeking a valuation of about $1 billion its initial public offering, according to people with knowledge of the matter.

Key events this week:

• Bank of Japan rate decision, Tuesday
• Germany ZEW survey expectations, Tuesday
• European Central Bank Vice President Luis de Guindos speaks, Tuesday
• US housing starts, Tuesday
• Eurozone consumer confidence, Wednesday
• Fed rate decision; Chair Jerome Powell holds news conference, Wednesday
• Reddit’s IPO, Wednesday
• ECB’s Christine Lagarde speaks, Wednesday
• Eurozone S&P Global Services PMI, S&P Global Manufacturing PMI, Thursday
• Bank of England rate decision, Thursday
• US Conference Board leading index, existing home sales, initial jobless claims, Thursday
• Nike, FedEx earnings, Thursday
• Japan CPI, Friday
• Germany IFO business climate, Friday
• Atlanta Fed President Raphael Bostic speaks, Friday
• ECB’s Robert Holzmann and Philip Lane speak, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.9% as of 9:55 a.m. New York time
• The Nasdaq 100 rose 1.4%
• The Dow Jones Industrial Average rose 0.2%
• The Stoxx Europe 600 fell 0.2%
• The MSCI World index rose 0.7%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.0888
• The British pound was little changed at $1.2731
• The Japanese yen fell 0.1% to 149.23 per dollar

Cryptocurrencies

• Bitcoin fell 1.1% to $67,551.29
• Ether fell 2.4% to $3,544.55

Bonds

• The yield on 10-year Treasuries advanced one basis point to 4.32%
• Germany’s 10-year yield was little changed at 2.45%
• Britain’s 10-year yield declined three basis points to 4.07%

Commodities

• West Texas Intermediate crude rose 0.8% to $81.66 a barrel
• Spot gold was little changed

Source

Advertisement

Click To Join Our Community Telegram Group