US open: Stocks jump as bond bears throw in the towel

Wall Street was moving higher in a lacklustre day in terms of the corporate and economic news-flow, amid data showing the largest inflows into bonds for 122 weeks.

Citigroup Inc.

$68.76

10:57 15/11/24

0.90%

$0.61

As of 1606 BST the Dow Jones Industrials was higher by 0.52% or 110.69 points at 21,293.44, as the S&P 500 gained 0.49% or 11.95 points to 2,445.77 and the Nasdaq Composite advanced 0.31% or 19.55 points to 6,341.26.

Acting as a backdrop, the US dollar spot index was up by 0.46% to 97.36 as the unexpected result of the UK General Elections triggered a small bounce in the greenback.

The risk of the unexpected in Britain, together with caution around events in Qatar, the FBI's Comey, ECB and the US Federal Reserve, drove $16.0bn of inflows into global bonds last week, the most in 122 weeks, according to strategists at Bank of America-Merrill Lynch.

Nevertheless, the same investment bank also revealed that fund managers' average cash levels were running at 4.9% - versus a 10-year mean of 4.5% - and therefore perhaps not yet indicating 'irrational exhuberance'.

Some market observers also took note on Friday of how volatility was again moving lower, despite concerns in some quarters regarding the medium-term stability of the Trump administration and around the insistence from the US central bank that further interest rates hikes were still on the cards for after next week's FOMC meeting.

The Chicago Board of Options Exchange's VIX volatility index was off by 6.7% to 9.48.

Wholesale inventories in the US shrank by 0.5% month-on-month in April (consensus: -0.1%), revised data from the Department of Commerce showed. That led analysts at Barclays Research to trim their tracking estimate for second quarter US GDP growth from 2.1% to 2.0%.

From a sector stand-point, the best performance was being seen in the following industrial groups: Non-ferrous metals (2.90%), Banks (2.33%) and Basic Resources (2.17%).

Citi was a top riser after UBS upgraded its view on the stock from 'sell' to 'hold'. However, the upgraded was predicated on analyst Saul Martinez' belief that US president Donald Trump's policy promises were less likely to come to fruition.

In parallel, the yield on the benchmark 10-year US Treasury note was up by three basis points to 2.22%.

Dow Jones - Risers

Goldman Sachs Group Inc. (GS) $222.84 1.86%
JP Morgan Chase & Co. (JPM) $86.52 1.85%
Pfizer Inc. (PFE) $32.10 1.10%
Caterpillar Inc. (CAT) $106.14 1.08%
Merck & Co. Inc. (MRK) $63.83 1.00%
Johnson & Johnson (JNJ) $131.60 0.81%
Chevron Corp. (CVX) $104.76 0.73%
United Technologies Corp. (UTX) $120.68 0.62%
Cisco Systems Inc. (CSCO) $31.76 0.49%
American Express Co. (AXP) $80.32 0.46%