“There’s some profit taking going on, they’re looking to rotate into some of the stuff that hasn’t performed as well,” said Keith Gangl, portfolio manager for Gradient Investments.
A broad rally from industrial goods to health-care shares sent the Stoxx Europe 600 Index to its best increase in a week. Adding to the earlier optimism was US President Donald Trump's announcement Monday that he’s considering a tax cut on capital gains, as well as rising hopes for an effective Covid-19 vaccine.
“It seems like a market in the final stages of a rally where investors try and play catch up in the highest beta/most cyclical areas, such as small caps, energy, financials, industrials,” said Sameer Samana, Wells Fargo Investment’s senior global market strategist. “It is a risk-on market, but with a slightly different flavour than the one we saw while real rates and the dollar were declining.”
See also: Longer treasuries fall with dollar as Trump moves to fire Cook
Elsewhere, the resignation of Lebanon’s government after the devastating explosion in Beirut threatened to upend prospects of a debt restructuring deal in the next few months.
Here are some key events coming up:
- Earnings include E.ON, Deutsche Telekom, Carlsberg, Tencent and JD.com.
- New Zealand’s central-bank policy decision is due on Wednesday.
- US CPI for July is scheduled for Wednesday.
- China releases a slew of data for July on Friday, including industrial production and retail sales.
See also: Analysts see Asian stocks, currencies supported by dovish Powell
These are the main moves in markets:
Stocks
- The S&P 500 Index dipped 0.8% to 3,333.76 as of 4:01 p.m. New York time, the first retreat in more than a week and the largest decrease in more than two weeks.
- The Dow Jones Industrial Average dipped 0.4% to 27,688.29, the first retreat in more than a week.
- The Nasdaq Composite Index dipped 1.7% to 10,782.82, the lowest in more than a week on the largest decrease in more than two weeks.
- The MSCI All-Country World Index decreased 0.1% to 563.77.
Currencies
- The Bloomberg Dollar Spot Index increased 0.1% to 1,181.46, the highest in a week.
- The euro was little changed at US$1.1733 ($1.61015), the weakest in almost two weeks.
- The Japanese yen depreciated 0.5% to 106.54 per dollar, the weakest in more than two weeks on the largest fall in more than a week.
Bonds
- The yield on 10-year Treasuries climbed four basis points to 0.63%, the highest in more than three weeks on the biggest surge in more than two months.
- Germany’s 10-year yield jumped five basis points to -0.48%, the highest in more than two weeks on the largest surge in almost six weeks.
- Britain’s 10-year yield jumped seven basis points to 0.2%, the highest in five weeks on the biggest surge in more than four months.
Commodities
- West Texas Intermediate crude dipped 1% to US$41.49 a barrel.
- Gold depreciated 5.4% to US$1,916.58 an ounce, the weakest in more than two weeks on the biggest tumble in more than seven years.
- Copper decreased 0.6% to US$2.84 a pound.
