US Yields Jump Before a Record $70 Billion Sale: Markets Wrap

(Bloomberg) — Treasury yields jumped ahead of a record $70 billion sale of five-year notes, with equities struggling to gain much traction despite a rally in tech megacaps.

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This week’s hefty slate of bond supply will help determine whether this is a turning point for the market, which has weathered four straight weeks of losses. Equities fluctuated, with Tesla Inc. leading gains in megacaps as chief Elon Musk vowed to launch less-expensive vehicles. Chipmakers also caught a bid on a bullish forecast from Texas Instruments Inc. Later Wednesday, Meta Platforms Inc. is due to report results.

Treasury 10-year yields rose six basis points to 4.66%. The S&P 500 hovered near 5,070. The Philadelphia Stock Exchange Semiconductor Index climbed 2%.

The yen weakened beyond 155 per dollar for the first time in more than three decades, fueling risk that the key level may prompt Japan to step into the market. Oil whipsawed as traders weighed inventory data and geopolitical risks, with Israel saying it struck around 40 Hezbollah sites in southern Lebanon.

“If you take a look at what we’ve seen over the first quarter, basically the returns for the S&P are in line with earnings growth,” Katrina Dudley at Franklin Templeton, told Bloomberg Television. “We think that valuations are fair. Therefore, for the S&P to work as we go through the rest of the year, we need to continue to deliver on earnings growth.”

Interest rates staying elevated longer, along with economic uncertainty and geopolitical turmoil have lessened the appeal of some of the stock market’s cheapest strategies.

Investors this month have pulled some $200 million out of value based exchange-traded funds, according to data compiled by Bloomberg Intelligence. In contrast, growth stocks have attracted more than $3 billion in inflows — despite a shaky stock market that’s raised concerns of more downside to come. That diminished interest in cheap stocks comes on the heels of lackluster performances of common value products.

Corporate Highlights:

• Boeing Co. burned through $3.93 billion in cash in the first quarter, a less dramatic drain than analysts had predicted, as the embattled planemaker continues to slow output to get a handle on its manufacturing issues.

• B. Riley Financial Inc.’s auditors signed off on its annual report, while flagging concerns about weak internal controls.

• Amazon.com Inc. and Microsoft Corp.’s investments into artificial intelligence startups will get deeper scrutiny from the UK’s antitrust watchdog, the latest example of how global regulators are grappling with how the world’s largest technology firms are influencing the booming market.

• AT&T Inc. beat analysts’ estimates for profit in the first quarter as it added more wireless phone customers than expected.

• Biogen Inc. reported first-quarter profit that beat Wall Street’s expectations as the biotech giant’s new Alzheimer’s drug Leqembi gained traction and cost cuts took hold.

• Visa Inc. reported a quarterly profit that beat Wall Street predictions as US credit-card spending climbed.

• Humana Inc. pulled its guidance for next year amid mounting pressures in its Medicare business.

• Hasbro Inc. reported first-quarter earnings that beat estimates, a promising sign for the company’s turnaround efforts.

• Mattel Inc. reported a smaller-than-expected first-quarter loss, benefiting from fast sales of its Hot Wheels miniature cars and lower costs.

• Citigroup Inc. turned bearish on Molson Coors Beverage Co., expecting sales trends will weaken as benefits from last year’s Bud Light boycott fade.

• Solar manufacturers are asking the US government to slap duties on $12.5 billion of imported equipment from Southeast Asia, setting the stage for a sweeping trade probe that threatens to make power projects more expensive.

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Key events this week:

• US GDP, wholesale inventories, initial jobless claims, Thursday

• Microsoft, Alphabet, Airbus earnings, Thursday

• Japan rate decision, Tokyo CPI, inflation and GDP forecasts, Friday

• US personal income and spending, PCE deflator, University of Michigan consumer sentiment, Friday

• Exxon Mobil, Chevron earnings, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 was little changed as of 10:44 a.m. New York time

• The Nasdaq 100 rose 0.5%

• The Dow Jones Industrial Average fell 0.2%

• The Stoxx Europe 600 fell 0.4%

• The MSCI World index rose 0.2%

Currencies

• The Bloomberg Dollar Spot Index rose 0.2%

• The euro fell 0.1% to $1.0688

• The British pound fell 0.1% to $1.2432

• The Japanese yen fell 0.2% to 155.08 per dollar

Cryptocurrencies

• Bitcoin fell 2.2% to $64,908.11

• Ether fell 0.4% to $3,197.27

Bonds

• The yield on 10-year Treasuries advanced six basis points to 4.66%

• Germany’s 10-year yield advanced nine basis points to 2.60%

• Britain’s 10-year yield…