Canada Markets open in 5 hrs 3 mins

Stocks Hit Four-Week High on Earnings; Pound Jumps: Markets Wrap

Claire Ballentine and Sarah Ponczek
Stocks Hit Four-Week High on Earnings; Pound Jumps: Markets Wrap

(Bloomberg) -- U.S. stocks touched four-week highs, led by health care and financial shares, as earnings season began in earnest. The pound strengthened as the U.K. and European Union moved closer to a Brexit deal.

The Nasdaq Composite Index jumped more than 1.2%, while the S&P 500 topped 3,000 on an intraday basis for the first time in three weeks. Treasury yields rose amid the risk-on backdrop.

“Things on the earnings front seem to have gotten off to a pretty decent start, interest rates -- although they’ve perked back up a little -- are still extremely low, and this trade deal and positive Brexit talk are good for world growth,” said Gary Bradshaw, a portfolio manager at Hodges Capital Management. “I like what we see, and the market’s obviously responding well to that.”

In earnings news:

Johnson & Johnson raised its sales and earnings forecast for the year.UnitedHealth beat profit estimates and raised its full-year outlook.JPMorgan’s third-quarter results beat estimates, sending its shares higher.Goldman Sachs reported investment bank revenue and earnings per share that undershot estimates, but its equities sales and trading was a beat.BlackRock said there was a decline in fixed income inflows from the previous quarter as clients moved some money back into equities.

The pound strengthened and gilts fell after two EU officials said negotiators in Brussels are closing in on a draft Brexit deal that could lead to a breakthrough before the end of Tuesday. Crude oil fell for a second day and gold dropped.

Japan’s equity gauge jumped as trading resumed after a long weekend during which President Donald Trump announced progress on an interim trade accord with China. Markets elsewhere in Asia were mixed. The Stoxx Europe 600 Index rose, with all 19 sectors advancing.

Investors are closely analyzing earnings, given the global backdrop of slowing growth and a host of unpredictable macro risks. The International Monetary Fund made a fifth-straight cut to its 2019 global growth forecast, citing a broad deceleration across the world’s largest economies as trade tensions undermine the expansion.

“The earnings reports that will be particularly noteworthy are those from companies that are tied directly to the economic cycle,” said Michael Geraghty, equity strategist at Cornerstone Capital Group.

Meanwhile, the Turkish lira jumped and the country’s benchmark stock index rose after Trump imposed milder penalties over its military campaign in Syria than U.S. lawmakers had demanded.

Here are some key events coming up this week:

Wednesday brings a monetary policy decision in South Korea.U.S. retail sales are forecast to increase for a seventh straight month. Sales in the “control group” are also expected to rise. Consumer spending is carrying the weight of U.S. economic growth so the data will be monitored closely for any signs of slowing.China releases third-quarter GDP, September industrial production and retail sales data on Friday.

Here are the main moves in market:

To contact the reporters on this story: Claire Ballentine in New York at cballentine@bloomberg.net;Sarah Ponczek in New York at sponczek2@bloomberg.net

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

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.