Bloomberg
“S&P 500 Tops 2,900 as Trade-Sparked Gains Persist.”
U.S. stocks padded all-time highs, with the S&P 500 Index topping 2,900 for the first time amid speculation that the Trump administration will continue to de-escalate global trade skirmishes. The dollar retreated.
Equities around the globe reacted favorably to news of the breakthrough on trade announced by the U.S. and Mexico, though gains were muted as investors awaited more clarity and tensions with China remained. Carmakers and miners were the biggest winners in the Stoxx Europe 600 Index. Equities in Japan rose while those in China slipped. The yuan climbed after the country’s central bank strengthened the daily fixing against the greenback by the most in more than 14 months.
The Mexican peso held onto Monday’s gains as investors clamored for details and clarity on where the new trade deal leaves Canada. U.K. equities rose in a catch-up rally as traders returned from a holiday, while the pound advanced as Prime Minister Theresa May said a no-deal break with Europe wouldn’t be the end of the world. The Bloomberg Dollar Spot Index fell and Treasuries slipped. Italian stocks dropped as measures of sentiment in the country disappointed.
Optimism around the U.S.-Mexico deal is helping shift the news agenda in markets in the wake of Trump’s legal woes last week, while the Federal Reserve’s outlook has also boosted sentiment. Gains for risk assets remain fragile, however, as hopes for a similar trade breakthrough between America and China fade and a host of threats remain, from U.S. relations with Russia and North Korea to Chinese growth prospects.
Elsewhere, Turkey’s lira fell and Brent crude oil edged up to almost $77 a barrel. Bitcoin climbed for the fourth successive weekday, breaking above both $7,000 and its 50-day moving average. Terminal users can read more in our Bloomberg Markets Live blog here.
Reuters
“Russia to hold biggest war games in nearly four decades.”
Russia will next month hold its biggest war games in nearly four decades, Defense Minister Sergei Shoigu said on Tuesday, a massive military exercise that will also involve the Chinese and Mongolian armies.
The exercise, called Vostok-2018 (East-2018), will take place in central and eastern Russian military districts and involve almost 300,000 troops, over 1,000 military aircraft, two of Russia’s naval fleets, and all its airborne units, Shoigu said in a statement.
The maneuvers will take place at a time of heightened tension between the West and Russia, which is concerned about what it says is an unjustified build-up of the NATO military alliance on its western flank.
NATO says it has beefed up its forces in eastern Europe to deter potential Russian military action after Moscow annexed Ukraine’s Crimea in 2014 and backed a pro-Russian uprising in eastern Ukraine.
The war games, which will take place from Sept. 11-15, are likely to displease Japan which has already complained about what it says is a Russian military build-up in the Far East.
Japanese Prime Minister Shinzo Abe is due to attend a forum in Vladivostok over the same period, and a Japanese Foreign Ministry official said on Tuesday Tokyo always paid attention to shifts in Russian-Chinese military cooperation. Shoigu said the war games would be the biggest since a Soviet military exercise, Zapad-81 (West-81) in 1981.
BBC News
“Toyota to invest $500m in Uber in driverless car deal.”
Japanese carmaker Toyota is to invest $500m (£387m) in Uber and expand a partnership to jointly develop self-driving cars. The firm said this would involve the «mass-production» of autonomous vehicles that would be deployed on Uber’s ride sharing network.
It is being viewed as a way for both firms to catch up with rivals in the competitive driverless car market. The deal also values Uber at some $72bn, despite its mounting losses. That is up 15% since its last investment in May but matches a previous valuation in February.
According to a press release issued by the firms, self-driving technology from each company will be integrated into purpose-built Toyota vehicles. The fleet will be based on Toyota’s Sienna Minivan model with pilot trials beginning in 2021.
Shigeki Tomoyama, executive vice president of Toyota Motor Corporation, said: «This agreement and investment marks an important milestone in our transformation to a mobility company as we help provide a path for safe and secure expansion of mobility services like ride-sharing.» Both Toyota and Uber are seen as lagging behind in developing self-driving cars, as firms such as Waymo, owned by Alphabet, steam ahead.
Bloomberg
“Home Prices in 20 U.S. Cities Post Smallest Gain Since 2016.”
Home prices in 20 U.S. cities rose in June at the slowest monthly pace in almost two years, as demand cools in the face of affordability constraints including elevated mortgage rates, according to S&P CoreLogic Case-Shiller data released Tuesday.
The figures reinforce other recent signs that the residential real estate market is softening. The National Association of Realtors said purchases of previously owned homes fell to a two-year low in July amid supply constraints and escalating prices. Government data showed a similar trend in the new-home market, with sales dropping to a nine-month low.
While a strong job market and elevated consumer optimism have continued to provide support for home sales in major cities, hurdles include mortgage rates near a seven-year high, as well as a dearth of listings. Wage gains also remain tepid.
Las Vegas led the latest gains with a 13 percent annual increase, displacing Seattle as the fastest gainer, as employment and population advance in the Nevada city, according to the report. Seattle had a 12.8 percent increase, followed by 10.7 percent in San Francisco. While all cities posted advances from a year earlier, New York was the only metropolitan area to see a drop from the previous month, as changes to tax deductions hamper demand.