Stocks Trade Mixed After Another Run at Highs

Stocks were mixed as investors took stock of the stellar gains seen since the start of the year. Yields in developed-market bonds stayed higher after a slide spurred in part by expectations the U.S. will avoid a government shutdown, keeping fiscal spending flowing.

Chinese shares in Hong Kong added to their 2018 surge, though benchmarks were down in Tokyo, and struggled to stay in the green in Seoul. The yen was little changed as traders sifted through news that some at the BOJ think at some point a discussion on normalization will be needed. Bitcoin bounced back above $10,000, having dropped below the threshold for the first time since Dec. 1. Oil held gains as OPEC shows determination to curb production.

China’s fourth-quarter GDP came in ahead of economists’ estimates. December retail sales were softer than expected, while fixed investment and industrial output figures beat forecasts.

The latest sign of confidence in global growth came from Apple Inc., which climbed after saying it will bring hundreds of billions of dollars back to the U.S. from overseas to invest in jobs and facilities. The firming outlook for growth and bullish profit expectations will keep the bull run in stocks going until 2019 or beyond, according to a Bank of America survey of fund managers. At the same time, Pacific Investment Management Co.’s Joachim Fels warned that “the fact that the fear is gone is the main reason why we should be worried” about the market climb.

"It’s time for relative caution but we’re still overall pro-equity," Lucy MacDonald, chief investment officer for global equities at Allianz Global Investors, said on Bloomberg Television. "The nominal returns in markets are liable to be lower than they’ve been in the recent past."

A small shift is taking place at the Bank of Japan, with a minority of policy makers raising the need to eventually start discussing policy normalization, even though they agree the current stimulus program must continue unchanged for some time, according to people familiar with talks at the central bank. With the Japanese economy on a solid footing, investors have begun to wager that the BOJ is about to join its global peers and begin unwinding its extraordinary monetary stimulus, particularly after a tweak to the central bank’s purchases of long-dated bonds on Jan. 9.

Terminal users can read more in our markets blog.

Here’s what to watch out for this week:

U.S. housing starts probably slipped in December for the first time in three months as frigid winter weather impeded work, forecasts show ahead of Thursday’s release.

Central banks in Indonesia, Turkey and South Africa are all expected to stay on hold over the next day.

And these are the main moves in markets:

Stocks

Euro Stoxx 50 futures rose 0.3 percent in early European trading. Futures on the S&P 500 were little changed after the underlying gauge advanced 0.9 percent on Wednesday.

The Hang Seng China Enterprises Index of mainland Chinese shares traded in Hong Kong was up 1.5 percent, the highest since June 2015. The Shanghai Composite rose 0.4 percent.

Australia’s S&P/ASX 200 Index was little changed.

Japan’s Topix index was down 0.7 percent at the close, while the Nikkei 225 Stock Average fell 0.4 percent

South Korea’s Kospi index was little changed as the central bank kept its benchmark rate unchanged, as anticipated.

The MSCI All-Country World Index slipped after adding 0.5 percent Wednesday to close at an all-time high.

Currencies

The Bloomberg Dollar Spot Index rose 0.2 percent.

The Aussie was little changed at 79.72 U.S. cents after a solid monthly jobs report failed to lift bets on higher interest rates.

The euro was trading at $1.2206.

The British pound eased up to $1.3840, the highest since June 2016.

The yen was flat at 111.20 per dollar after dropping 0.8 percent Wednesday in its first retreat in more than a week.

Bonds

The yield on 10-year Treasuries held gains after rising five basis points to 2.59 percent Wednesday.

German 10-year bund yields rose two basis points to 0.58 percent.

Commodities

West Texas Intermediate crude was little changed at $64 a barrel.

Gold was flat at $1,328.24 an ounce.

Source: Bloomberg