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Stocks Rise After Strong Economic Data, Earnings: Markets Wrap

(Bloomberg) — Stocks rebounded from a rout sparked by inflation worries as strong data and earnings signaled the economy is growing rapidly.The S&P 500 climbed a day after comments from Treasury Secretary Janet Yellen on rates briefly rattled markets. The Nasdaq 100 bounced back from its worst rout since March. Data showed service providers expanded at the second-fastest pace on record and a reading on prices accelerated, while private employers added the most jobs in seven months. As the earnings season rolled in, results from General Motors Co., T-Mobile US Inc. and Lyft Inc. beat estimates. Copper and lumber rallied, adding to concern over inflation.Those worries come as companies warn that supply shortages and logistical logjams may force them to raise prices. Despite the government spending that’s been authorized in response to the pandemic, inflation is unlikely to get out of control, according to Federal Reserve Bank of Chicago President Charles Evans. Price increases above the Federal Reserve’s 2% target likely won’t be sustained enough to meet the guidance for rate hikes, Cleveland Fed President Loretta Mester said.“Interest rates will still likely remain very low,” said Fawad Razaqzada, an analyst at ThinkMarkets. “Any near-term weakness for the stock markets will probably be a buying opportunity rather than a reason for the bears to pounce.”Money managers who’ve spent the bulk of their careers profiting from deflationary trends need to quickly switch gears or risk an “inflation shock” to their portfolios, warns JPMorgan Chase & Co. chief global markets strategist Marko Kolanovic.“Given the still high unemployment, and a decade of inflation undershoot, central banks will likely tolerate higher inflation and see it as temporary,” he wrote. “The question that matters the most is if asset managers will make a significant change in allocations to express an increased probability of a more persistent inflation.”Here are some key events to watch this week:Bank of England rate decision ThursdayThe April U.S. employment report is released on FridayThese are some of the main moves in markets:StocksThe S&P 500 rose 0.3% as of 1 p.m. New York timeThe Nasdaq 100 rose 0.3%The Dow Jones Industrial Average rose 0.3%The MSCI World index rose 0.4%CurrenciesThe Bloomberg Dollar Spot Index was little changedThe euro fell 0.2% to $1.1993The British pound rose 0.1% to $1.3903The Japanese yen was little changed at 109.30 per dollarBondsThe yield on 10-year Treasuries was little changed at 1.59%Germany’s 10-year yield advanced one basis point to -0.23%Britain’s 10-year yield advanced two basis points to 0.82%CommoditiesWest Texas Intermediate crude was little changedGold futures rose 0.5% to $1,784 an ounceFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.



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