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Stocks climb, futures steady on earnings optimism: markets wrap

The dollar held a decline.
Image: Bloomberg

Asian stocks climbed Thursday after solid company earnings boosted Wall Street, easing concerns about peak economic growth and coronavirus flareups. The dollar held a decline.

An MSCI Inc. gauge of Asia-Pacific shares rose for a second day, led by cyclical sectors like materials and energy, though technology also pushed higher. Hong Kong and Australia outperformed, while Japan is shut for a holiday. European contracts advanced and US futures edged up after the S&P 500’s biggest back-to-back increase in two months.

Ten-year Treasury yields headed toward 1.3% as the recent bond rally fizzled. A 20-year debt auction fared poorly. Cash Treasuries won’t trade in Asia due to the Japan holiday.

Oil held a two-day gain to trade around $70 a barrel. Bitcoin hovered at $32 000 after getting a boost from prominent voices including billionaire Elon Musk, who said his space exploration company SpaceX owns the digital token.

Corporate performance and ongoing central bank policy support are tempering some of the concerns over peaking global growth and the spread of delta virus variant, which roiled markets at the start of the week. More than 85% of the S&P 500 firms reporting so far have beaten analysts predictions, according to data compiled by Bloomberg. US earnings calls have also underlined the pick up in inflation, with many executives highlighting greater pricing power.

The turnaround from the selloff early in the week shows “corporations have been very resilient through all this,” David Mazza, Direxion head of product, said on Bloomberg Television. “Earnings estimates are quite remarkable, probably some of the best on record. Even through all this, we have central bank liquidity remaining very abundant, economic growth being robust. Certainly there are some question marks around how long that can continue, but for the time being momentum is at investors’ back.”

Not everyone is upbeat. Guggenheim Investments Chairman Scott Minerd warned on Bloomberg Television that September and October could be rough for stocks and US equities could pull back 15%.

Later Thursday European Central Bank officials will outline how their new inflation goal affects their intentions for future monetary policy. President Joe Biden dismissed concerns that the US will experience persistent inflation, echoing views held by the Federal Reserve policy makers.

Some key events to watch this week:

  • European Central Bank rate decision Thursday
  • Bank Indonesia rate decision Thursday
  • US existing home sales Thursday
  • The Tokyo Summer Olympics begin Friday

Here are some of the main market moves:

Stocks

  • S&P 500 futures climbed 0.1% as of 7:10 a.m. in London. The S&P 500 rose 0.8%
  • Nasdaq 100 futures added 0.1%. The Nasdaq 100 rose 0.8%
  • Australia’s S&P/ASX 200 index rose 1.1%
  • South Korea’s Kospi index increased 1%
  • Hong Kong’s Hang Seng index gained 1.6%
  • China’s Shanghai Composite Index rose 0.3%
  • Euro Stoxx 50 futures rose 0.4%

Currencies

  • The Japanese yen was at 110.16 per dollar, up 0.1%
  • The offshore yuan traded at 6.4694 per dollar
  • The Bloomberg Dollar Spot Index was steady
  • The euro was at $1.1793

Bonds

  • The yield on 10-year Treasuries advanced seven basis points to 1.29% Wednesday
  • Australia’s 10-year bond yield jumped four basis points to 1.20%

Commodities

  • West Texas Intermediate crude dipped 0.2% to $70.17 a barrel
  • Gold was at $1 798.35 an ounce, down 0.3%
© 2021 Bloomberg

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