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Wall Street stocks rose on Monday as investors prepared for data and earnings reports from the US retail sector this week, hoping to gauge the mood of the American consumer.
The benchmark S&P 500 finished 0.6 per cent higher, led by tech stocks, while the tech-focused Nasdaq Composite added 1.1 per cent.
Shares of chipmaker Nvidia led the gainers on the S&P 500 with a 7.1 per cent increase, making a recovery after last week, when it notched its biggest weekly loss in 11 months.
Regional lenders took a tumble and were among the worst-performing stocks in the S&P 500 after US banking regulators indicated they wanted to require large regional banks to come up with “living wills” that would make it easier to wind down a troubled institution.
Traders will this week assess US retail sales data on Tuesday, as well as earnings reports from consumer goods giants such as Walmart, Target and Home Depot to determine the health of the US consumer more than a year after borrowing costs started to climb.
“Food services and travel sectors could post material gains if wealthier households splashed out in the summer months, offsetting weakness in the increasingly strapped lower-income segments,” Karl Schamotta, chief market strategist at Corpay, said about the upcoming retail figures.
The Federal Reserve on Wednesday will release minutes from its July meeting, which will provide insight into its members’ decision to raise the federal funds rate to its highest level in 22 years.
The dollar, which tends to strengthen when investors expect higher rates, rose 0.3 per cent against a basket of six peer currencies, trading at its highest level since the beginning of July.
“The dollar’s bounce over the past month has been fundamentally driven as recent data suggest a resilient US economy,” said Joseph Manimbo, senior market analyst at Convera.
In government debt markets, yields on policy-sensitive two-year US Treasuries rose 0.08 percentage points to 4.97 per cent, while yields on the benchmark 10-year notes were slightly higher at 4.2 per cent. Bond yields rise as prices fall.
Equities were down in Asia, as China’s flagging property sector heightened investors’ concerns over the health of the world’s second-largest economy as it reopened after three years of severe Covid-19 lockdowns.
Over the weekend Chinese property developer Country Garden suspended trading in at least 10 of its mainland bonds. The company, once the largest developer in China by sales, missed international bond payments last week, bolstering investor fears that a two-year liquidity crisis across the country’s real estate sector was threatening to escalate.
Hong Kong’s Hang Seng index fell 1.6 per cent, with the Hang Seng Mainland Properties index — which tracks China’s real estate developers — down 3.7 per cent. In mainland China, the benchmark CSI 300 dropped 0.7 per cent.
“Ongoing difficulties in the Chinese property sector are exacerbating last week’s poor set of Chinese data, which included deflation, trade and new loans,” said Chris Turner, head of foreign exchange strategy at ING.
The moves come after Chinese equities experienced their steepest fall since March last week, as a string of economic data releases signalled the country was slipping into deflation.
Exports declined and its banks issued the lowest amount of new loans since the 2008 financial crisis. More data is expected this week, with the release of China’s retail sales and industrial production figures.
Weak economic data put pressure on oil prices, as investors fretted over global demand for fuel. International benchmark Brent crude settled 0.7 per cent lower at $86.21 a barrel, while US marker West Texas Intermediate declined by 0.8 per cent to $82.51.
Elsewhere in Asia, Japan’s Topix lost 1 per cent and South Korea’s Kospi slipped 0.8 per cent.
In Europe, the region-wide Stoxx Europe 600 closed 0.2 per cent higher, after switching between minor gains and losses throughout the day. Germany’s Dax rose 0.5 per cent and France’s Cac 40 finished 0.1 per cent higher.
Shares in Amsterdam-based Philips led gains in Europe, up 4.4 per cent, after the billionaire Agnelli family took a 15 per cent stake in the Dutch group to support its pivot from electronics to health technology.
