Stocks Climb to 5-Week High; Dollar Extends Drop: Markets Wrap – Yahoo Canada Finance

(Bloomberg) — U.S. equities touched a five-week high on expectations earnings will offer an optimistic outlook for the world’s biggest economy amid a raging coronavirus pandemic. Oil erased an earlier loss.

The S&P 500 briefly went back to being even this year, led by the consumer discretionary, health care and materials sectors. The Nasdaq Composite hit another record high. Traders are awaiting reports this week from a slew of companies that have yet to provide concrete guidance on the impact of the virus. Shares of PepsiCo Inc. rose after the snack-maker reported stronger-than-expected second-quarter sales. Tesla Inc. jumped as much as 16%.

“It’s remarkable how optimistic investors seem to be,” said John Carey, portfolio manager at Pioneer Investment Management. “The market has been fairly strong as investors look toward a potential recovery.”

European stocks rose with government bond yields. Oil was little changed ahead of an OPEC+ meeting at which the group may announce plans to start tapering historic production cuts.

With global stocks trading near their highest since February, focus now turns to whether the profit outlook will back up bullishness fueled by central bank and fiscal policy support. Traders have largely shrugged off new coronavirus outbreaks in some parts of the world, with Florida on Sunday posting the biggest one-day rise in cases since the pandemic began in the U.S., reporting 15,300 new infections.

There’s reason for optimism even though earnings are estimated to have contracted by more than 40% in the worst quarter since the financial crisis, as analysts upgrade their forecasts for the rest of the year.

“The backdrop is positive for all sectors of the market,” said Gerry Sparrow, president of Sparrow Capital Management Inc. “The reason for that backdrop is that the recovery has taken hold, so jobs data, consumer credit, home building strength signaled that the economy has shifted in a positive direction.”

Here are some key events coming up:

JPMorgan, Bank of America, Wells Fargo, Goldman Sachs, BNY Mellon and Citigroup start the U.S. earnings season for banks.Wednesday brings the Bank of Japan’s policy decision and a Governor Haruhiko Kuroda briefing.The EIA crude oil inventory report is due Wednesday.China releases second-quarter GDP on Thursday as well as key economic indicators for June.The European Central Bank meets to set monetary policy on Thursday, with President Christine Lagarde holding a virtual press conference afterward.

These are the main moves in markets:

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