Futures gain, stocks extend rally as dollar dips: markets wrap

Gold was at $1 708.85 an ounce, down 0.2%.
Image: Behrouz Mehri/AFP/Getty Images

Stocks extended a rally Wednesday amid a retreat in the dollar and speculation that the worst of this year’s equity rout may be over.

Technology shares fueled a climb of about 1.5% in a gauge of Asian equities after the S&P 500’s biggest jump since June. European futures pushed higher and US contracts were in the green too, encouraged by a Netflix Inc. surge in extended trading on a smaller-than-expected subscriber loss.

The tech climb swept along Chinese firms following a report that regulators are wrapping up an investigation into ride-hailing giant Didi Global Inc. with a hefty fine — stoking hopes of an end to Beijing’s crackdown on the sector.

A dollar gauge has shed about 1% this week, underscoring waning haven demand for the greenback and a brighter mood in markets. Treasuries held a decline that’s taken the 10-year yield back above 3%.

The euro hovered around a two-week high against the dollar on the possibility of a bigger-than-expected European Central Bank interest-rate hike Thursday.

Speculation that company earnings will hold up and that the Federal Reserve will avoid very aggressive monetary tightening is giving investors some hope. Worries about a global downturn due to rising interest rates, Europe’s energy challenges and China’s Covid and property-sector woes are taking a back seat.

“Stocks have been beaten down,” Kristina Hooper, chief global market strategist at Invesco, wrote in a note. “That doesn’t mean we won’t see more downside for some stock markets around the world, especially given that earnings expectations are likely to be adjusted downward. But I believe we are far closer to the bottom than the top.”

In Europe, Gazprom PJSC is poised to restart gas exports through its Nord Stream pipeline to Europe on Thursday at reduced capacity, as the continent braces for shortages amid Russia’s war in Ukraine.

Elsewhere, crude oil slipped to around $103 a barrel. Bitcoin hovered above $23,000 after climbing out of a one-month-old trading range.

Key events to watch this week:

  • Earnings this week include Tesla
  • US Treasury Secretary Janet Yellen visits South Korea. Tuesday
  • Reserve Bank of Australia releases July minutes. Tuesday
  • UK Chancellor Nadhim Zahawi and Bank of England Governor Andrew Bailey speak at event. Tuesday
  • Bloomberg Crypto Summit in New York. Tuesday
  • Bank of Japan, European Central Bank rate decisions. Thursday
  • Nord Stream 1 pipeline scheduled to reopen following maintenance. Thursday

Some of the main moves in markets:

Stocks

  • S&P 500 futures rose 0.4% as of 7 a.m. in London. The S&P 500 rose 2.7%
  • Nasdaq 100 futures rose 0.4%. The Nasdaq 100 rose 3.1%
  • Japan’s Topix index rose 2.3%
  • Australia’s S&P/ASX 200 Index gained 1.7%
  • South Korea’s Kospi index climbed 0.7%
  • Hong Kong’s Hang Seng Index rose 1.6%
  • China’s Shanghai Composite Index rose 0.7%
  • Euro Stoxx 50 futures increased 0.1%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.1%
  • The euro was at $1.0236, up 0.1%
  • The Japanese yen was at 138.10 per dollar, up 0.1%
  • The offshore yuan was at 6.7545 per dollar, down 0.1%

Bonds

  • The yield on 10-year Treasuries was at 3.02%
  • Australia’s 10-year bond yield rose four basis points to 3.55%

Commodities

  • West Texas Intermediate crude fell 1.2% to $103 a barrel
  • Gold was at $1 708.85 an ounce, down 0.2%
© 2022 Bloomberg

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