U.S. corporate strength emboldens equity bulls: markets wrap themselves

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This content was published on October 15, 2021 – 20:39

(Bloomberg) – Stocks had their best week since July as strong corporate earnings and a surprise increase in retail sales spurred a recovery in companies that are more likely to benefit from an economic rebound. Treasury bills have fallen.

Stocks rose on Friday even after data showed consumer confidence fell in early October. Retailers and banks dominated the S&P 500’s gains. Goldman Sachs Group Inc. climbed after seeing a sharp increase in trading activity, while broker Charles Schwab Corp. jumped to record profits. Trucking giant JB Hunt Transport Services Inc. and Alcoa Corp. – America’s largest aluminum producer – also skyrocketed with better-than-expected results.

“We believe that going long in equities is the best course of action and that cyclical stocks such as financials, industrials, energy and materials are positioned for further gains,” said Chris Zaccarelli, chief investment officer. investments at Independent Advisor Alliance. “Utilities and consumer staples are going to face headwinds in the form of higher interest rates and higher inflation.”

Goldman Sachs CEO David Solomon said inflation, especially in wages, remains the top concern for business executives and shareholders. His comments follow similar concerns voiced this week by other CEOs, including Brian Moynihan of Bank of America Corp. and James Gorman of Morgan Stanley.

The world’s most crucial metals continued their meteoric rise as energy shortages forced further production cuts and increased pressure on manufacturers, fueling concerns about inflation. Brent oil hovered around $ 85 a barrel amid a global energy crisis that sent prices soaring.

Some other highlights of the company:

  • Cryptocurrency-exposed stocks like Marathon Digital Holdings Inc. and Riot Blockchain Inc. surged. The Securities and Exchange Commission is set to authorize the first U.S. Bitcoin futures exchange-traded fund to begin trading, according to people familiar with the matter.
  • Johnson & Johnson has risen as its Covid-19 vaccine booster secured a key recommendation from U.S. regulatory advisers that brings the extra shot closer to authorization.
  • Virgin Galactic Holdings Inc. is delaying the start of commercial flights next year after postponing a test flight, disappointing investors with the unexpected delay in its commercial space tourism plans.

For more market analysis, read our MLIV blog.

Some of the main movements in the markets:

Actions

  • The S&P 500 rose 0.7% at 4 p.m. New York time
  • The Nasdaq 100 rose 0.6%
  • The Dow Jones Industrial Average rose 1.1%
  • The MSCI World index increased by 0.9%

Currencies

  • Bloomberg Dollar Spot Index fell 0.1%
  • The euro was little changed at $ 1.1606
  • The British pound rose 0.5% to $ 1.3746
  • Japanese yen fell 0.5% to 114.23 per dollar

Obligations

  • The yield on 10-year treasury bills rose six basis points to 1.57%
  • German 10-year rate rose two basis points to -0.17%
  • UK 10-year yield rose six basis points to 1.11%

Merchandise

  • West Texas Intermediate crude rose 1.1% to $ 82.23 a barrel
  • Gold futures fell 1.6% to $ 1,768.70 an ounce

© 2021 Bloomberg LP

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