Treasuries, Gold Fall on U.S. GDP as Dollar Advances

By Nikolaj Gammeltoft & Stephen Kirkland – Jul 31, 2013 7:02 PM GMT+0200

The Standard & Poor’s 500 Index extended its best monthly gain since 2011 while Treasuries and gold fell as U.S. economic growth topped forecasts and investors awaited a Federal Reserve policy statement. The dollar climbed.

The S&P 500 increased 0.2 percent to 1,689.79 at 12:58 p.m. in New York to extend its July rally to 5.2 percent. Treasury 10-year note yields jumped four basis points to 2.66 percent, up from 2.49 percent on June 28. Gold futures tumbled 1.3 percent, trimming the biggest monthly gain since January 2012, while oil rallied more than 1 percent. The MSCI Emerging Markets Index headed for the longest losing streak since April. The dollar gained against 10 of 16 major counterparts.

11:57

July 30 (Bloomberg) — Mark Mobius, executive chairman of Templeton Emerging Markets Group, talks about the Chinese government’s plans to reduce overcapacity, the outlook for Chinese and Asian markets, and investment strategy. He spoke with Bloomberg’s Tony Jordan in Bangkok yesterday. (Source: Bloomberg)

September Still Target for Fed Tapering: Magnus

4:57

July 31 (Bloomberg) — George Magnus, senior independent advisor at UBS, discusses the timeframe for the Federal Reserve to begin tapering bond buying and his expectations for market reaction. He speaks on Bloomberg Television’s “The Pulse.”

Antipodean's Ferguson on Markets, Strategy

6:00

July 31 (Bloomberg) — Craig Ferguson, a currency hedge fund manager at Antipodean Capital Management, talks about global financial markets and his investment strategy. Ferguson also discusses the prospects for Reserve Bank of Australia monetary policy and China’s economic growth. He speaks with John Dawson on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

Gross domestic product rose at a 1.7 percent annualized rate, more than the 1 percent advance predicted in a Bloomberg survey, Commerce Department figures showed today. The Fed has indicated its $85 billion monthly bond purchases could be trimmed should the U.S. economy meet its forecasts, though Chairman Ben S. Bernanke has said there’s no fixed schedule for tapering stimulus. The European Central Bank and Bank of England meet tomorrow.

“The data looks good and I don’t think it changes anything with regards to the path that the Fed is on in terms of its QE tapering plans,” Dean Junkans, the Minneapolis-based chief investment officer for Wells Fargo Private Bank, which oversees $170 billion in client assets, said via phone. “The improving economic data and the good job growth indicate that the Fed will start tapering later this year and that the extraordinary QE will end sometime next year.”

Market Leaders

Consumer and energy companies helped lead gains among seven of the 10 main industry groups in the S&P 500. Comcast Corp. climbed 6 percent after posting earnings that topped analyst estimates. Facebook Inc. briefly rose above its $38 initial public offering price for the first time since its debut trading day, before retreating.

Some 33 companies in the S&P 500 are releasing quarterly results today. Of those that have reported so far this season, 73 percent have topped analysts’ profit projections and 56 percent beat sales estimates, according to data compiled by Bloomberg.

Payroll data, to be released Aug. 2, will show employers added 185,000 workers in July, after increasing 195,000 in June, a separate survey shows. The jobless rate probably fell to 7.5 percent from 7.6 percent, according to economists’ projections.

Volumes

Trading volumes for S&P 500 companies were 4.9 percent below the 30-day average while Stoxx 600 volumes were 12 percent below. The European gauge advanced 5.1 percent in July, also the biggest rally since October 2011.

Anheuser-Busch InBev NV, the world’s biggest brewer, rose 6.9 percent, the most in more than three years, after second-quarter profit growth topped estimates as it improved sales inBrazil and sold higher-priced beers in the U.S. Eutelsat Communications SA slid 6.2 percent after agreeing to buy Satelites Mexicanos SA in a transaction valued at $1.14 billion including debt.

The MSCI Emerging Markets Index fell 0.8 percent, trimming this month’s advance to 0.6 percent. Benchmark gauges inTurkeyMalaysia and the Philippines slid more than 1.2 percent. The Shanghai Composite rose for a second day, gaining 0.2 percent after Chinese policy makers pledged to stabilize growth.

Egypt’s EGX 30 Index advanced 12 percent this month, after the military ousted Islamist President Mohamed Mursi, triggering $12 billion of aid pledges from Persian Gulf countries.

Commodities Retreat

The S&P GSCI Index of 24 commodities rose 0.8 percent, reversing an earlier loss of 0.5 percent.

West Texas Intermediate crude oil gained 1.5 percent to $104.64 a barrel in New York and has advanced 8.5 percent this month.

The dollar gained 0.3 percent against the yen and dropped 0.2 percent versus the euro. The Bloomberg U.S. Dollar Index, which tracks the greenback against 10 other major currencies, added 0.2 percent and trimmed this month’s decline to 1.2 percent.

To contact the reporters on this story: Nikolaj Gammeltoft in New York atngammeltoft@bloomberg.net; Stephen Kirkland in London at skirkland@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s