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Europe stocks, US futures rise; bond yields slip: markets wrap

As investors awaited key economic data and assessed earnings reports.
Image: Soichiro Koriyama/Bloomberg

Stocks rose with US futures on Thursday as investors awaited key economic data and assessed earnings reports. Treasury yields fell.

European equities climbed as electrical power firm ABB Ltd. boosted its revenue guidance and a rally in base metals lifted miners. Most Asian shares advanced, though gauges for Hong Kong and China fell as the Chinese central bank’s liquidity operations signaled it’s seeking to contain rising leverage.

US futures pointed to a rebound after indexes eased from all-time peaks on Wednesday, when a drop in cryptocurrency exchange Coinbase Global Inc. overshadowed strong bank earnings. Results are due later on Thursday from firms including Citigroup Inc., BlackRock Inc. and Bank of America Corp.

The ruble slid with the Biden administration poised to take action against Russian individuals and entities in retaliation for alleged misconduct related to the SolarWinds hack and the US election.

Expectations of a strong economic recovery, combined with optimism over monetary and fiscal stimulus, have pushed equities near record levels as company reporting continues. Data due Thursday on US jobless claims and retail sales will be keenly watched, as will any developments on the vaccine rollout.

“With the upswing in the economy and inflationary pressures, cyclical sectors are going to do particularly well, especially the new cyclicals — stocks related to infrastructure, electrical grid modernisation, clean energy and storage,” said Eli Lee, head of investment strategy at Bank of Singapore. “But bear in mind when you get returns that high, volatility is par for the course.”

Elsewhere, Bitcoin fell back from an overnight record. Oil steadied after Wednesday’s surge on signs the demand outlook was improving.

In Asia, traders are also watching for further tremors from the sharp selloff in the bonds of distressed-debt enterprise China Huarong Asset Management Co., which has pushed investment-grade spreads higher.

Some key events to watch this week:

  • US data including initial jobless claims, industrial production and retail sales come Thursday.
  • China economic growth, industrial production and retail sales figures are on Friday.

These are some of the main moves in financial markets:

Stocks

  • Futures on the S&P 500 Index rose 0.5% as of 8:35 a.m. London time.
  • The Stoxx Europe 600 Index rose 0.3%.
  • The MSCI Asia Pacific Index gained 0.3%.
  • The MSCI Emerging Market Index was little changed.

Currencies

  • The Bloomberg Dollar Spot Index sank 0.1%.
  • The euro was little changed at $1.1985.
  • The British pound rose 0.1% to $1.3792.
  • The onshore yuan was little changed at 6.533 per dollar.
  • The Japanese yen strengthened 0.1% to 108.83 per dollar.

Bonds

  • The yield on 10-year Treasuries sank two basis points to 1.62%.
  • The yield on two-year Treasuries dipped less than one basis point to 0.16%.
  • Germany’s 10-year yield declined one basis point to -0.27%.
  • Britain’s 10-year yield declined one basis point to 0.793%.
  • Japan’s 10-year yield decreased less than one basis point to 0.092%.

Commodities

  • West Texas Intermediate crude was little changed at $63.14 a barrel.
  • Brent crude was little changed at $66.57 a barrel.
  • Gold strengthened 0.6% to $1 747.35 an ounce.
© 2021 Bloomberg

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