GLOBAL MARKETS-Equities hit five-month peak, bonds dip, as earnings season starts

GLOBAL MARKETS-Equities hit five-month peak, bonds dip, as earnings season starts

Reuters  | Jul 13, 2020 22:10

GLOBAL MARKETS-Equities hit five-month peak, bonds dip, as earnings season starts

By David Randall
NEW YORK, July 13 (Reuters) - World equity benchmarks hit a
five-month peak and perceived safe -havens such as the dollar
and U.S. government bonds dipped on Monday as investors turned
to second-quarter earnings for signs that corporate profits will
recover from the economic toll of the coronavirus pandemic.
Wall Street banks JPMorgan, Citigroup and Wells Fargo are
set to kick off on Tuesday a U.S. results season that Refinitiv
data suggests will show the second-biggest quarterly drop in
corporate earnings since 1968. "Equity indices are clearly trying to look through into Q3
and beyond, but with the U.S. struggling to shake off the
coronavirus phase one, this should be factored into equity risk
premia," said Raymond James European strategist Chris Bailey.
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.99%, touching its highest levels since February,
following broad gains in Europe and Asia.
In morning trading on Wall Street, the Dow Jones Industrial
Average .DJI rose 212.55 points, or 0.82%, to 26,287.85, the
S&P 500 .SPX gained 25.03 points, or 0.79%, to 3,210.07 and
the Nasdaq Composite .IXIC added 149.17 points, or 1.4%, to
"Ongoing grim U.S. COVID-19 infection news continues to be
summarily ignored in favor of ongoing optimism regarding the
timeline for the discovery and rapid roll-out of an effective
vaccine and/or more policy support for asset prices and the U.S.
economy," said Ray Attrill, head of FX strategy at NAB.
The risk-on rally saw the U.S. dollar dip 0.1% =USD
against a basket of major currencies and Italy's 10-year yield
hit the highest level in over a week at 1.33% as investors
bagged profits after the recent rush to safety cooled.
The euro, meanwhile, rose 0.2% to $1.132 to maintain its
slow uptrend since late last month. Looming large for the common
currency was a planned EU summit on July 17-18, where leaders
need to bridge gaps on long-term budget and economic stimulus
plans. FRX/
"If an agreement weren't to be reached there, then they
still expect one within weeks. It's worth remembering that there
are number of complex issues to be worked out," Deutsche Bank
strategist Jim Reid said.
U.S. Treasury yields edged higher after nearing record lows
last week. Benchmark 10-year notes US10YT=RR last fell 9/32 in
price to yield 0.6611%, from 0.633% late on Friday.
Super-low rates have in turn been a boon for non-yielding
gold which hovered near nine-year highs after five straight
weeks of gains. Spot gold XAU= added 0.8% to $1,812.38 an
ounce. U.S. gold futures GCc1 gained 0.38% to $1,805.00 an
U.S. crude CLc1 recently fell 0.86% to $40.20 per barrel
and Brent LCOc1 was at $43.03, down 0.49% on the day.

Global assets
Global currencies vs. dollar
Emerging markets
MSCI All Country Wolrd Index Market Cap

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