US stocks set more all-time highs

U.S. stocks set more all-time highs, while European equities approached records, as corporate earnings helped boost sentiment amid lingering concerns about inflation and growth.

The SP 500 and Dow Jones Industrial Average hit intraday records as Tuesday’s round of earnings kicked off, with United Parcel Service Inc.  and General Electric Co. gaining after strong results. Facebook Inc. dropped as a pledge to buy back more shares and increase spending on digital offerings was offset by a revenue miss. Big-tech peers Twitter Inc., Alphabet Inc. and Microsoft Inc. are reporting after the market close on Tuesday.

“The outlook is getting healthier,” Esty Dwek, chief investment officer at FlowBank, said on Bloomberg TV. “Growth has mostly been delayed, not derailed, whether it was the delta variant, some of these supply chains, on-and-off mandates around vaccines and closures, depending on where you are in the world.”

The Stoxx Europe 600 index rose more than 0.5%, edging close to a record. Reckitt Benckiser Group Plc gained after the maker of Strepsils throat lozenges raised its sales forecast. Novartis AG advanced on news it may spin off its generic-drug unit.

The 10-year U.S. Treasury yield gained and the dollar was steady. The debate over price pressures continues: former Treasury Secretary Lawrence Summers said officials are unlikely to deal with “inflation reality” successfully until it’s fully recognized.

“We’re coming off a 40-plus-year bond-bull market,” said Megan Horneman, portfolio strategy director, Verdence Capital Advisors, on Bloomberg TV and Radio’s “Surveillance.” “And right now we’re looking at interest rates that should be a lot higher from here. So with duration, as high as it is in the fixed income market, you have to be very cautious around fixed income.”

Earnings season is helping to counter concerns that elevated inflation and tightening monetary policy will slow the recovery from the pandemic. Some 81% of SP 500 members have reported better-than-expected results so far, though Citigroup Inc. warned that profit growth may be close to peaking.

In China, Modern Land China Co. became the latest builder to miss a payment on a dollar bond, in a further sign of stress in the nation’s real estate sector. Defaults from Chinese borrowers on offshore bonds have jumped to a record.

WTI crude oil traded around $84 a barrel as investors weighed the outlook for U.S. stockpiles and prospects for talks that may eventually help to revive an Iranian nuclear accord, allowing a pickup in crude exports.

Gold fell to $1,790 an ounce and Bitcoin hovered around $62,500.

Here are some events to watch this week:

• Earnings: Amazon, Apple, Microsoft, Twitter, Samsung Electronics, China Vanke, PetroChina, Ping An Insurance Group
  Australia CPI, Wednesday
• U.S. wholesale inventories, U.S. durable goods, Wednesday
• Bank of Japan monetary policy decision, briefing, Thursday
• ECB rates decision, President Christine Lagarde briefing, Thursday
• U.S. GDP, initial jobless claims, Thursday
• G-20 joint finance and health ministers meeting ahead of the weekend leaders’ summit, Friday

For more market analysis, read our MLIV blog.

Some of the main moves in markets:

Stocks

• The SP 500 rose 0.6% as of 10:32 a.m. New York time
• The Nasdaq 100 rose 1.1%
• The Dow Jones Industrial Average rose 0.4%
• The Stoxx Europe 600 rose 0.7%
• The MSCI World index rose 0.5%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.1603
• The British pound rose 0.2% to $1.3796
• The Japanese yen fell 0.5% to 114.25 per dollar

Bonds

• The yield on 10-year Treasuries advanced two basis points to 1.65%
• Germany’s 10-year yield was little changed at -0.11%
• Britain’s 10-year yield declined one basis point to 1.13%

Commodities

• West Texas Intermediate crude rose 0.3% to $83.98 a barrel
• Gold futures fell 1.1% to $1,787.10 an ounce