U.S. Stocks Trade Mixed After Global Rally Fizzles: Markets Wrap

(Bloomberg) -- The end-of-month rebound in global equities faded as investors assessed a scaled-back fiscal stimulus proposal in the U.S. against the rising toll of the pandemic.

The main U.S. equity gauges were mixed as small gains in tech companies blunted losses for energy producers and lenders. In Europe, banks led broad-based declines in the Stoxx Europe 600 index. Oil fell toward $40 in New York as traders looked to U.S. inventory data for clues on demand recovery. Treasuries were little changed, while the dollar weakened.

With the pandemic’s global death toll exceeding 1 million and virus cases on the upswing in many locales, investors are pinning hopes on a $2.2 trillion stimulus proposal by Democrats to help support economic growth. Markets are also girding for the first presidential debate Tuesday, and traders have pushed up overnight implied volatilities on Mexico’s peso in anticipation of price swings.

“We definitely need another round of stimulus here, not only for confidence for the American public and workers, but also for the markets,” Michelle Connell, the owner and president of Portia Capital Management, said on Bloomberg Television. “Going into this election, that would definitely help.”

Elsewhere, the MSCI AC Asia Pacific Index was little changed as South Korean shares advanced, while Hong Kong stocks fell. Nippon Telegraph & Telephone Corp. announced plans to turn its wireless carrier unit NTT Docomo Inc. into a wholly owned subsidiary in a $40 billion buyout. NTT Docomo shares surged by their limit at the close in Tokyo.

Here are some key events coming up:

Federal Reserve officials including New York Fed President John Williams speak later on Tuesday.China purchasing manager indexes are due Wednesday, and expected to show September manufacturing improved slightly while non-manufacturing moderated from August’s level.The EIA crude oil inventory report comes out Wednesday.The September U.S. employment report on Friday will be the last before the November election.

These are the main moves in markets:

Stocks

The S&P 500 Index was little changed as of 9:38 a.m. New York time.The Stoxx Europe 600 Index dipped 0.3%.The MSCI Asia Pacific Index was little changed.

Currencies

The Bloomberg Dollar Spot Index declined 0.2%.Sterling rose 0.2% to $1.2857.The Japanese yen weakened 0.1% to 105.61 per dollar.

Bonds

The yield on 10-year Treasuries fell less than one basis point to 0.65%.Germany’s 10-year yield dipped one basis point to -0.54%.Britain’s 10-year yield decreased one basis point to 0.19%.Italy’s 10-year yield declined three basis points to 0.84%.

Commodities

West Texas Intermediate crude dipped 1.5% to $40 a barrel.Gold rose 0.1% to $1,884.22 an ounce.Silver rose 0.6% to $23.83 per ounce.

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