Futures Climb After Retail Sales as Options Expire: Markets Wrap

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(Bloomberg) — Stocks climbed after better-than-estimated U.S. retail sales, while traders braced for heightened volatility amid the expiration of equity options. The dollar fell.

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The S&P 500 rebounded from a three-day slide, led by gains in industrial and consumer companies. The gauge was poised for its third weekly advance, the longest since late August. Pfizer Inc. rallied after saying it could seek emergency-use authorization for its Covid-19 vaccine in the U.S. by late November if the shot is shown to be effective. Boeing Co. jumped as Europe’s top aviation regulator said the 737 Max plane may return to the region’s skies by year-end. Hertz Global Holdings Inc. surged after the car rental giant arranged a new $1.65 billion debt package to help fund its bankruptcy case.

U.S. retail sales rose in September at the fastest pace in three months, capping a third-quarter rebound for consumer spending that faces increasing headwinds. The recovery from the pandemic-driven downturn is threatened, though, by a new acceleration in coronavirus infections and Congress’s failure to agree on a fresh stimulus package, developments that appear to be weighing on an already-slowing labor market.

The jump in retail sales “suggests consumer strength is pretty robust,” said Mike Loewengart, managing director of investment strategy at E*Trade Financial. “The momentum on that front could be a positive for the market as investors look for signs of recovery. That said, it remains to be seen if this is an outlier or a trend.”

Meanwhile, U.S. manufacturing production unexpectedly declined in September — the first decrease in five months, pointing to a setback for factories as the pandemic drags on.

© Bloomberg Call open interest is climbing in popular tech stocks

Friday brings the expiration of monthly options on U.S. equities, indexes and exchange-traded funds and notes, and possibly a good dose of turbulence. While the pace of transactions is less frenzied than before, analysts have spotted a worrying pattern: Much of the action remains concentrated in bullish options in some of the world’s largest technology companies.

Investors also monitored negotiations between Britain and the European Union, which are set to continue next week even after Boris Johnson said he believes a trade deal is now unlikely.

These are some of the main moves in markets:

Stocks

The S&P 500 climbed 0.4% as of 9:48 a.m. New York time.The Stoxx Europe 600 Index gained 0.9%.The MSCI Asia Pacific Index fell 0.2%.

Currencies

The Bloomberg Dollar Spot Index dipped 0.1%.The euro gained 0.2% to $1.1729.The British pound fell 0.1% to $1.29.The Japanese yen strengthened 0.1% to 105.32 per dollar.

Bonds

The yield on 10-year Treasuries fell less than one basis point to 0.73%.Britain’s 10-year yield decreased two basis points to 0.164%.Germany’s 10-year yield dipped two basis points to -0.63%.

Commodities

West Texas Intermediate crude slid 1.7% to $40.26 a barrel.Gold weakened 0.1% to $1,906.13 an ounce.

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