Upbeat bank earnings buoy US stocks; USD, Treasury yields dip

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NEW YORK (Businesshala) – US stocks rose on Thursday as strong bank earnings reports boosted investors’ risk appetite, while both the dollar and benchmark Treasury yields braced their recent climbs to pull back from multi-month highs. slap down.

FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, US, October 6, 2021. Businesshala / Brendan McDermid / File photo

But oil prices climbed again, keeping inflationary pressures alive and supporting the condition that central banks can tighten policies and raise interest rates as quickly as possible.

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In the United States, with data showing that September recorded the smallest rise in prices for producers in nine months, inflation risks were real, but perhaps not as dire as some had imagined.

Indeed, any worries about rising prices were eclipsed on Thursday by signs that the economy and businesses are thriving, as the number of Americans filing new claims for jobless benefits last week dropped below 300,000 for the first time in 19 months. fell.

The dollar moved to a more than a year high this week on bets on a 2022 US interest rate hike, with the 10-year US Treasury yield easing for a second day, spurred to drive up global borrowing costs. does.

“So far the earnings of the bank have been strong. This gives traders some hope that we will see a strong earnings season,” said Tim Griskey, chief investment strategist at Inverness Counsel in New York. “But if we start seeing poor guidance from companies, the market could come right down.”

The Dow Jones Industrial Average jumped 1.57%, the S&P 500 climbed 1.46%, and the Nasdaq Composite climbed 1.68%.

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The mood was encouraging after US lenders Wells Fargo & Co, Citigroup Inc and Bank of America Corp all beat profits, beating market expectations.

The pan-European STOXX 600 index gained 1.20% and MSCI’s worldwide shares gained 1.34%.

Forex and commodity markets were giving mixed signals. Gold, often seen as a hedge against rising inflation, added to gains on Wednesday after enjoying its best session in seven months.

Spot gold rose 0.3% to $1,797.49 an ounce and US gold futures were up 0.26% to $1,798.40 an ounce. [GOL/]

Oil bulls pushed Brent crude back to $85 a barrel. Brent climbed 0.57% to $83.65 and US crude rose 0.62% to $80.96 a barrel. [O/R]

Natural gas climbed 2%, rising more than 150% already this year, driving global energy prices up. Bitcoin, sometimes seen as an inflation hedge, fell 0.34% to $57,180.34, having bounced back from a five-month high.

Meanwhile, the dollar pulled back, allowing the euro, British pound, Australian and New Zealand dollars all to regain ground.

The euro held steady at $1.1595, with the dollar index down 0.05%. [USD/]

The US Federal Reserve is expected to tighten US monetary policy more sharply than ever before, as the greenback hit a more than one-year high on Tuesday, but is now down for October.

Neil Jones, head of FX sales at Mizuho, ​​said of the dollar drop, “It appears to be a classic case of a ‘buy rumour, sell fact’ mentality.” “The Fed reaffirmed the expectations of many investors of, I would suggest, holding long dollar positions.”

The benchmark 10-year Treasury yield declined to 1.5107% from Wednesday’s 1.549%. The two-year Treasury yield also fell to 0.3501%, from 0.368% on the previous day. [US/]

Additional reporting by Sujatha Rao and Elizabeth Hawkroft in London; Editing by Mark Potter, Bernadette Baum and Hugh Lawson

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