NEW YORK – U.S. equities rose to their highest level in almost a month as investors set aside concern about escalating trade tensions and rising political tension abroad to focus on the coming earnings season. The dollar gained versus major peers and Treasuries retreated.
The Standard & Poor’s 500 index climbed for a third day and the Dow Jones Industrial Average popped through key technical levels. Miners and energy producers took the Stoxx Europe 600 Index to a fifth consecutive advance, the longest winning streak since March. The MSCI Asia Pacific Index jumped the most in a month.
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The pound erased gains after pro-Brexit official Boris Johnson quit as the United Kingdom’s foreign secretary, throwing the government into turmoil over negotiations to leave the European Union. The dollar strengthened against most major peers. The Turkish lira retreated after President Recep Erdogan named his son-in-law finance minister. The Chinese yuan rebounded after its fourth weekly decline.
The start of earnings season this week may divert some attention away from the trade war that’s kept global stocks under pressure, while data out Friday supported sentiment. The U.S. jobs report showed another month of gains in excess of 200,000, while German industrial production beat all estimates for May. Those signs of strength contrasted with protectionist tensions after China retaliated against U.S. tariff increases.
“The markets, especially after the report on unemployment last week, seem to be pretty comfortable looking ahead and getting all the jitters about the trade war away,” Omar Aguilar, chief investment officer for equities at Charles Schwab Investment Management, said by phone. “Having the market paying more attention to earnings and fundamentals is clearly a good sign.”
These are some events to look out for this week:
Chinese trade data due at the end of the week will probably show slightly slower export growth, after early indicators pointed to softer overseas demand and weaker export orders, Bloomberg Economics said. China releases June Producer Price Index and Consumer Price Index on Tuesday, both of which should show a pickup.
The most noteworthy U.S. data is the June inflation report on Thursday, which consensus expects will show both headline and core price growth picking up. There’s another deluge of Treasury debt sales too, with a total $156 billion of notes and bills offered.
Earnings season gets going with JPMorgan Chase & Co. and Citigroup among the largest companies due to give results, as well as India’s Infosys Ltd.
Jeremy Herron and Sarah Ponczek are Bloomberg News staff writers.
