Wall Street stocks on track to snap five-session losing streak

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Stocks on Wall Street were on track to snap a five-session losing streak on Monday, led by gains in energy shares that climbed off the back of a six-week high in oil prices.

Brent crude jumped 0.8 per cent to $73.51 a barrel, the global benchmark’s strongest price since early August, following a bullish forecast by Opec in its monthly report.

Oil demand in 2022 was now projected to reach 100.8m barrels per day, exceeding pre-pandemic levels, said the cartel, adding that “the recovery in various fuels is expected to be stronger than anticipated and further supported by a steady economic outlook in all regions”.

The S&P 500, the US blue-chip index, was up 0.1 per cent at lunchtime in New York, while the tech-heavy Nasdaq Composite was flat.

The S&P had its worst week since June last week, although it remains close to the all-time high reached earlier this month, as investors fretted about the US Federal Reserve cutting its $120bn a month of bond purchases designed to boost lending and spending during the pandemic.

Comments in recent days from Fed officials, however, have suggested that potential tapering by the central bank meant policymakers thought the US economy was through the worst of the coronavirus crisis.

Patrick Harker, head of the Philadelphia Federal Reserve, told Nikkei that “markets are functioning well”. Emergency monetary stimulus “is no longer relevant”, he said.

His comments came after Cleveland Fed chief Loretta Mester said on Friday that the US economy had improved enough for the asset purchases to slow.

“We expect tapering to be viewed favourably by the stock market, as it suggests the economy is in a stronger state and doesn’t need as much Fed stimulus,” said Richard Saperstein, chief investment officer at wealth manager Treasury Partners.

Banking and oil shares, along with domestically focused small-caps, were an obvious choice for investors if such views were correct, said Alessio de Longis, senior portfolio manager at Invesco.

“Financial companies do well when their loans have a higher probability of being paid back because the economy is strong,” he said. “For energy and industrial and basic materials companies it is the same. A strong real economy boosts demand for driving, tourism [and] construction activity.”

Alongside energy, financials was among the top-performing sectors in the S&P 500 index on Monday, up by 1.2 per cent.

The same pattern was repeated in Europe, where energy and financial stocks led the continent’s bourses higher. This helped the region-wide Stoxx Europe 600 benchmark close up 0.3 per cent, ending five sessions of back-to-back falls.

London’s FTSE 100, which has a heavy leaning towards oil and gas groups, advanced 0.6 per cent, as did Frankfurt’s Xetra Dax.

The yield on the 10-year US Treasury note was steady at 1.33 per…