Stocks rise, US futures rise before Powell: markets close

(Bloomberg) – Stocks advanced and US stock futures rose slightly ahead of later expected comment from Federal Reserve Chairman Jerome Powell that could influence views on the central bank’s rate path.

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Energy stocks led gains in Europe after oil major BP Plc boosted shareholder returns and posted record profits. Futures on the S&P 500 and Nasdaq 100 contracts were slightly higher, while those on the Dow remained flat. Pinterest Inc. fell in premarket trading after posting lower-than-expected revenue.

A gauge of Asian stocks gained after its biggest two-day drop in four months. Baidu Inc. rose after saying it will launch a ChatGPT-like bot in March.

The dollar stabilized after weakening against all members of the Group of 10 earlier, as Treasuries recovered part of a two-day rout triggered by traders raising bets on future Fed tightening. Recent moves have dwarfed the best start to the year for cross-asset returns since 1987.

Investors are considering whether Powell will dampen market optimism for interest rate cuts later in 2023, after January’s strong payroll report and comments from other Fed officials on the possibility of a higher spike than managers politicians had previously expected.

“I expect Powell to drive home that point that they’ve done a lot and there will be tightening that will impact the economy later this year,” Jack McIntyre, a portfolio manager at Brandywine Global Investment Management LLC, said on Bloomberg Television.

In Asia, the yen gained after Japan’s payroll data beat estimates, fueling bets that the central bank will adjust or withdraw from its stimulus program under a new governor.

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Shares in Adani Group climbed, ending a rout that exceeded $100 billion as the conglomerate’s founders prepaid some debts and traders covered short positions.

Turkish assets extended the decline as the country continued to contend with earthquakes that killed at least 4,000 in Turkey and Syria.

Geopolitical concerns are also back on the radar. The United States is preparing to impose a 200% tariff on Russian-made aluminum, while the United States has begun recovering some parts of the Chinese balloon shot down by a fighter jet off the coast of South Carolina.

Elsewhere, oil was up for a second session after Saudi Arabia unexpectedly lifted crude oil prices in Asia, signaling confidence in the demand outlook. Advanced Gold.

Read: Bond traders are fast approaching the Fed’s view on peaking rates

Key events:

• US trade, Tuesday

• Fed Chairman Jerome Powell interviewed by David Rubinstein at the Economic Club of Washington on Tuesday

• President Joe Biden delivers the State of the Union address before Congress on Tuesday

• US Wholesale Inventories, Wednesday

• New York Fed Chairman John Williams is interviewed Wednesday at the Wall Street Journal live event

• Initial jobless claims in the US, Thursday

• ECB President Christine Lagarde attends the EU leaders’ summit on Thursday

• Bank of England Governor Andrew Bailey appears before the Treasury Committee on Thursday

• US University of Michigan Consumer Sentiment, Friday

• Friday the Fed’s Christopher Waller and Patrick Harker speak

Some of the major moves in the markets:

Actions

• The Stoxx Europe 600 was up 0.2% as of 10:06am London time

• S&P 500 futures are up 0.1%

• Nasdaq 100 futures up 0.3%

• Dow Jones Industrial Average futures were unchanged

• MSCI Asia Pacific index rose 0.4%

• The MSCI Emerging Markets Index has been slightly modified

Currencies

• The Bloomberg Dollar Spot Index has changed slightly

• The euro fell 0.1% to $1.0710

• The Japanese yen rose 0.6% to 131.89 to the dollar

• The offshore yuan rose 0.1% to 6.7975 to the dollar

• The British pound fell 0.1% to $1.2001

Cryptocurrencies

• Bitcoin climbed 0.3% to $22,988.38

• Ether rose 0.2% to $1,641.03

Bonds

• The 10-year Treasury yield fell two basis points to 3.62%

• Germany’s 10-year yield has changed slightly to 2.30%

• Britain’s 10-year yield has changed slightly to 3.24%

Goods

• Brent crude rose 1.7% to $82.39 a barrel

• Spot gold rose 0.4% to $1,875.28 an ounce

This story was produced with assistance from Bloomberg Automation.

–With assistance from Jason Scott, Matthew Burgess, Tony Jordan, Tassia Sipahutar and Michael Msika.

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