European stocks edged higher along with S&P 500 futures as investors weighed scattered signs of economic improvement against the accelerating spread of the coronavirus in the US, Brazil and India.
Auto shares and travel companies pushed up the Stoxx Europe 600 Index. The dollar dipped against all of its major peers after three days of gains. Poland’s zloty strengthened after voters denied President Andrzej Duda’s bid for quick re-election, forcing him into a runoff. European sovereign bonds dipped, while Treasuries were little changed.
In Asia, stocks fell more than 1% in Japan, Australia and Hong Kong. They had a more modest drop in China, where markets reopened after a two-day holiday.
Investors began the new week bracing for more risk-off sentiment as infections cases surpassed 10 million globally and a resurgence in the US continued to batter states likes Texas and Florida, with several halting plans to reopen. India’s economy is hurtling for its first contraction in more than 40 years, and without enough jobs, a volatile political climate is getting more so.
At the same time, more positive economic data emerged, including those showing China’s industrial companies saw the first monthly increase in profits since November. The yuan strengthened in offshore trading.
“The recovery is going to be much slower and much more uneven than most people believe,” David Hunt, president and CEO of PGIM Inc., said on Bloomberg TV. “Markets are priced for a much sharper V-shaped recovery which we don’t think is likely.”
Meanwhile, China’s central bank said it will implement new monetary tools to make sure liquidity reaches the real economy. The People’s Bank of China said it will increase the proportion of smaller company, credit and manufacturing loans, and continue to lower lending rates.
© 2020 Bloomberg