US blue-chips cling to gains as traders await interest rate hints
US blue-chips advanced for a third session on Monday — but barely — as investors awaited crucial data and central banker comments to give more direction on the future path for interest rates.
The benchmark S&P 500 squeezed out a 0.1 per cent gain, having been up almost 1 per cent around midday, but the tech-heavy Nasdaq Composite ended down 0.1 per cent after earlier rising 1.2 per cent.
Investors have in recent weeks been forced to readjust forecasts for interest rates and economic growth in the US and Europe after a succession of data in February indicated a series of aggressive rate rises had yet to fully tame inflation.
Yields on two-year Treasuries, which are more sensitive to interest rate changes, rose 0.03 percentage points to 4.89 per cent, but held below their 15-plus year peak near 4.95 per cent last week.
The yield on the 10-year Treasury note was up 0.02 percentage points at 3.98 per cent, having hit 4 per cent, a three-month high, last week.
The moves come ahead of US Federal Reserve chair Jay Powell’s semi-annual testimony to Congress over the next two days and the latest non-farm payroll report on Friday, which could potentially provide a dramatic end to the week.
“Further labour market tightness could stoke persistently high core inflation and spur the Fed to keep rates higher for longer,” said analysts at BlackRock in an investment outlook note. “We’re also watching China’s trade data to see how much pressure remains on exports.”
European stocks closed mixed although worries about Chinese growth weighed on commodity prices and dragged the FTSE 100 lower.
London’s blue-chip index shed 0.2 per cent. Miners Anglo American and Rio Tinto lost 3.7 per cent and 2.8 per cent respectively.
Europe’s benchmark Stoxx 600 gave up early gains to finish flat but some individual markets did better, with Germany’s Dax up 0.5 per cent and France’s CAC 40 ending 0.3 per cent higher.
European stocks were dented somewhat by the release of Eurozone retail sales data. Month-on-month growth was 0.3 per cent in January. While an improvement from December’s fall of 1.7 per cent, it was below forecasts for a 1.3 per cent rise.
“We’ve had surveys which held up better than expected, but the retail sales data is the first hard bit of data,” said Jack Allen-Reynolds, deputy chief eurozone economist at Capital Economics.
Christine Lagarde, president of the European Central Bank, is due to speak at a World Trade Organization event on Wednesday.
Yields on 10-year German Bunds rose 0.01 percentage points to 2.73 per cent.
The US dollar index, which measures the greenback against a basket of six peer currencies, fell 0.2 per cent.
Brent crude rose 0.6 per cent to $86.32 a barrel, while WTI, the US equivalent, was up 08 per cent at $80.60 a barrel.