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U.S. Stocks Rise Amid Recovery Bets, FDA Approval: Markets Wrap

(Bloomberg) — U.S. equities rose Monday as the Covid-19 immunization drive was bolstered by U.S. regulators granting full approval for the vaccine made by Pfizer Inc. and BioNTech SE.

The S&P 500 and Nasdaq 100 rebounded from lows last week as the approval could lead to more vaccine mandates amid a surge in delta variant cases that has threatened the momentum of the global economic recovery. Mixed U.S. data Monday showed July home sales coming in higher than expected while growth at U.S. services and factories slowed to an eight-month low.

Energy shares led the gains as oil rose above $65 a barrel in New York on improving sentiment. Treasuries were little changed and the dollar was weaker as investors also looked ahead to the Jackson Hole symposium Thursday, which may offer insights into how and when the Federal Reserve plans to taper its asset-purchase program. The tech-heavy Nasdaq Composite closed at a record.

“Amid another record high last Monday it’s remarkable that we’re looking to start the week yet again on the upside,” said Chris Larkin, managing director of trading at E*Trade Financial. “The gains last week couldn’t make up for the losses following the Fed confirming its intentions to taper its purchasing program. All eyes will remain on the Fed as investors will be looking for more guidance on the taper from Powell’s speech at Jackson Hole.”

If the delta strain persists, Dallas Fed President Robert Kaplan said he’s open to adjusting his view that the Fed should start tapering sooner rather than later. Meanwhile, Treasury Secretary Janet Yellen endorsed Jerome Powell for a second term as Fed chair, a move that could reduce uncertainty about the path for monetary policy.

“Solid economic and corporate profit growth, in conjunction with a still-accommodative Fed, means that the environment for stocks remains favorable,” said David Lefkowitz, head of equities Americas at UBS Global Wealth Management. “As a result of our higher EPS estimates, we raise our targets for the S&P 500 for December 2021 by 100 points to 4,600 and June 2022 by 150 points to 4,800.”

Aside from Fed comments, traders will be looking for the latest U.S. data on manufacturing, gross domestic product and jobs this week. The U.S. House of Representatives will also be holding key votes related to President Joe Biden’s $4.1 trillion economic agenda.

In Europe, the Stoxx Europe 600 index increased for a second day. In Asia, equities in China and Japan also gained. China has once again brought local Covid-19 cases down to zero.

Here are some events to watch this week:

U.S. Markit manufacturing PMI and existing home sales MondayBank of Korea policy decision; briefing by Governor Lee Ju-yeol ThursdayFed officials attend the Jackson Hole Economic Policy Symposium from Thursday through SaturdayU.S. GDP, initial jobless claims ThursdayJuly U.S. personal income and spending data Friday. Investors will scrutinize the personal consumption expenditures price index, an inflation measure closely watched by the Fed.

For more market analysis read our MLIV blog.

Some of the main moves in markets:

Stocks

The S&P 500 rose 0.9% as of 4:01 p.m. New York timeThe Nasdaq 100 rose 1.5%The Dow Jones Industrial Average rose 0.6%The MSCI World index rose 1.1%

Currencies

The Bloomberg Dollar Spot Index fell 0.5%The euro rose 0.4% to $1.1748The British pound rose 0.8% to $1.3731The Japanese yen rose 0.1% to 109.67 per dollar

Bonds

The yield on 10-year Treasuries was little changed at 1.25%Germany’s 10-year yield advanced one basis point to -0.48%Britain’s 10-year yield advanced one basis point to 0.53%

Commodities

West Texas Intermediate crude rose 5.3% to $65.44 a barrelGold futures rose 1.3% to $1,807.40 an ounce

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