Stock Rise With Earnings in Focus; Dollar Gains: Markets Wrap


(Bloomberg) — Stocks in Europe climbed a second day and U.S. index futures were mixed as a slew of corporate earnings took the focus off concerns about the economic impact of coronavirus flareups. Treasuries were steady and the dollar strengthened.

Travel and leisure headed a broad-based advance in the Stoxx Europe 600 index at the open. ASML Holding NV and Novartis AG were among the biggest gainers after positive earnings reports. SAP SE and Daimler AG declined, with the latter cutting sales forecasts due to the global chip shortage. Contracts on the S&P 500 edged higher and those on the Nasdaq 100 fluctuated after bargain hunters helped the S&P 500 to all but erase Monday’s slide in a rally led by cyclicals such as industrial stocks.

Treasury 10-year yields held above 1.2% ahead of an auction of 20-year securities, though it remains to be seen if the recovery in yields has legs amid lingering concerns about the delta virus variant that led traders to pare back bets on a Federal Reserve rate hike. The dollar extended gains against a basket of peers to a fifth day.

Spiking cases of the more contagious delta strain and curbs to fight infections in a range of nations spooked investors this week, prompting a selloff in risk assets on Monday. But loose U.S. monetary policy, still-high levels of economic expansion and robust corporate earnings growth remain props for sentiment.

“The correction we had is healthy to clear some of the excess out of the market and to get better balancing between growth and value,” Katie Koch, Goldman Sachs Asset Management’s co-head of fundamental equity, said on Bloomberg Television. “From a long-term perspective we are really still very constructive on equity markets, so we’d encourage clients to be overweight risk assets.”

Traders are monitoring ongoing political talks over a bipartisan $579 billion U.S. infrastructure spending package, part of President Joe Biden’s plan for a major fiscal injection into the U.S. economy. Separately, Biden administration officials said they’re starting to see signs of relief for the global semiconductor supply shortage.

Elsewhere, MSCI Inc.’s index of Asia-Pacific shares pared gains though remained on course to snap a three-day drop. Country performance was mixed, with Japan higher and Hong Kong retreating. Oil slipped and Bitcoin was back above the $30,000 level.

On the virus front, South Korea and Thailand reported record infections. Japan’s top Covid-19 adviser said new cases in Tokyo, where the Olympics start this week, could hit a record in early August. Johnson & Johnson’s single-dose vaccine produced relatively low levels of antibodies against the delta variant, according to a study that hasn’t yet been peer reviewed.

For more market commentary, follow the MLIV blog.

Some key events to watch this week:

European Central Bank rate decision ThursdayBank Indonesia rate decision ThursdayU.S. existing home sales ThursdayThe Tokyo Summer Olympics begin Friday

Here are some of the main market moves:

Stocks

The Stoxx Europe 600 rose 0.9% as of 8:25 a.m. London timeFutures on the S&P 500 rose 0.2%Futures on the Nasdaq 100 were little changedFutures on the Dow Jones Industrial Average rose 0.2%The MSCI Asia Pacific Index rose 0.1%The MSCI Emerging Markets Index fell 0.2%

Currencies

The Bloomberg Dollar Spot Index rose 0.2%The euro fell 0.2% to $1.1761The Japanese yen fell 0.1% to 109.97 per dollarThe offshore yuan rose 0.1% to 6.4787 per dollarThe British pound fell 0.2% to $1.3605

Bonds

The yield on 10-year Treasuries was little changed at 1.21%Germany’s 10-year yield was little changed at -0.42%Britain’s 10-year yield was little changed at 0.56%

Commodities

Brent crude fell 0.1% to $69.28 a barrelSpot gold was little changed

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Read More:Stock Rise With Earnings in Focus; Dollar Gains: Markets Wrap

2021-07-21 06:10:21

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