Stocks Rise as Political Tension Cools, Bonds Slip: Markets Wrap

U.S. stocks advanced with European shares as the dollar rebounded ahead of the Federal Reserve’s annual economic symposium in Jackson Hole, Wyoming, later this week. Havens including gold, the yen and government bonds retreated, even as the likes of Bridgewater Associates’ Ray Dalio said he was reducing risk.
The S&P 500 Index rose for a second day as geopolitical fears appeared to lessen. The Stoxx Europe 600 Index advanced from the lowest in more than a week as miners and chemical makers led gains across almost every sector.
Most European government bond yields followed Treasuries higher, while the dollar ended a two-day slide. The euro stayed lower in the wake of data showing German investor confidence declined for a third month. Crude gained before U.S. government data forecast to show stockpiles fell.
Investors seem to be getting over some of the sensitivity that characterized the past few days following political turmoil in Washington, fresh terrorist attacks in Europe and ongoing tension between the U.S. and North Korea. Nonetheless Dalio, the billionaire founder of the world’s largest hedge fund, said he’s “tactically reducing” risk because he’s concerned about growing internal and external conflict “leading to impaired government efficiency” in the U.S., according to a LinkedIn post Monday.
With little in the way of top-tier economic data out this week, markets are set to focus next on the annual conference of global central bankers hosted by the Kansas City Federal Reserve Bank at Jackson Hole. It starts on Thursday.
Amazon.com Inc.’s bid for Whole Foods Market Inc. faces a shareholder vote on Wednesday.
Combined sales of new (data Wednesday) and previously owned (Thursday) U.S. homes probably edged up in July from the prior month, indicating a still robust real estate market held in check by rising property prices, economists forecast.

(Bloomberg)