Stocks and commodities pared gains and the euro weakened after a German government spokesman damped expectations for a swift resolution to the region’s debt crisis. Spanish bonds declined.
The MSCI All-Country World Index added 0.4 percent at 11:35 a.m. in London after gaining as much as 0.8 percent. Standard & Poor’s 500 futures were 0.5 percent higher. BP Plc appreciated 5.5 percent after saying Anadarko Petroleum Corp. will pay $4 billion to settle all claims over the world’s largest accidental oil spill. The yield on 10-year Spanish bonds advanced for a sixth day, adding five basis points to 5.28 percent. Oil rose 0.8 percent in New York.
European Union leaders won’t provide the quick ending to the euro-area debt crisis that global policy makers are pushing for at an Oct. 23 summit, Steffen Seibert, Chancellor Angela Merkel’s chief spokesman, said at a news briefing in Berlin today. U.S. industrial production may have expanded for a fifth consecutive month in September while data tomorrow may show China’s economy grew more than 9 percent last quarter.
“This may prove to be a somewhat monumental instance of buy the rumor and sell the fact,” said Richard McGuire, a senior fixed-income strategist at Rabobank International in London. “The continued promise of a sweeping solution is underpinning a cautious ‘risk on’ tone.”
Stocks Rally
The MSCI All-Country World Index gained 5.4 percent in the five days ended Oct. 14, its largest weekly increase since July 2009. The Stoxx Europe 600 Index rallied 1.2 percent, extending its longest weekly winning streak since April, as all 19 industries in the gauge climbed. BP’s shares made the biggest contribution to the index’s advance after the company said that Anadarko will no longer pursue allegations of gross negligence against BP for its role in last year’s oil spill in the Gulf of Mexico. Royal Philips Electronics NV gained 3.3 percent after announcing plans to cut 4,500 jobs. Gauges of mining companies and carmakers both jumped more than 2.5 percent.
U.S. futures signal the S&P 500 may extend last week’s 6 percent jump, the steepest weekly increase since July 2009. El Paso Corp. (EP) surged 37 percent in German trading as Kinder Morgan Inc. agreed to buy the company for $21.1 billion in a deal that would create the largest U.S. natural-gas pipeline network.
The yield on the Portuguese 10-year security rose five basis points to 11.69 percent, from 11.21 percent the day before the run of gains began. The yield on the U.S. 30-year Treasury bond increased four basis points to 3.27 percent, rising for the second straight day. The euro weakened 0.4 percent to $1.3834.
Industrial Production
A Federal Reserve report due at 9:15 a.m. New York time will show that industrial production expanded for a fifth straight month in September, according to the median estimate in a survey of economists. The Empire State Index will show that manufacturing in the New York area contracted in October, according to economists.
Citigroup Inc. and Wells Fargo & Co. are among U.S. companies scheduled to release their results before the start of trading today, while International Business Machines Corp., the world’s fifth-biggest company by market value, will report earnings after the close of trading.
The MSCI Emerging Markets Index rose 1.7 percent, on course for its ninth straight gain, the longest winning streak in 16 months. The BUX Index jumped 2.1 percent in Budapest. Benchmark indexes gained at least 0.8 percent in South Africa, Russia and Turkey. The Hang Seng China Enterprises Index of Chinese shares traded in Hong Kong climbed 2.8 percent and the Kospi Index (KOSPI) jumped 1.6 percent in Seoul. Korea’s won also led gains amongst currencies, strengthening 1.3 percent against the dollar.
South Korea Growth
South Korean Finance Minister Bahk Jae Wan said at the Paris meeting the Asian nation’s economy is performing better than expected, while data tomorrow may show China’s gross domestic product increased 9.3 percent in the third quarter from a year earlier, according to the median estimate of 22 economists surveyed by Bloomberg. That would be the ninth consecutive quarter of expansion above 9 percent.
Oil climbed to $87.43 a barrel. Wheat rose 0.6 percent to $6.34 a bushel and arabica coffee advanced 0.5 percent to $2.4065 a pound. Aluminum gained 0.7 percent to $2,241.25 a metric ton and silver increased 0.9 percent to $32.45 an ounce.
The yen fell 0.2 percent against the dollar. The pound slipped 0.3 percent to $1.5777 as Ernst & Young LLP’s ITEM Club cut its U.K. growth forecast and said the Bank of England should lower its key interest rate as its new stimulus earlier this month is unlikely to be enough to revive economic growth.
read more: Olympus Wealth Management
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