Stocks, Futures Climb on China, Rates Optimism: Markets Wrap
(Bloomberg) — Stocks advanced with US futures as favorable news reports from China and data from Europe boosted risk appetite. The dollar fell and Treasuries rose.
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Contracts on all three major U.S. gauges rose, while the Stoxx Europe 600 Index saw broad gains. Hong Kong shares rallied as China considered further support for property developers. Alibaba Group Holding Ltd. led premarket gains in US-listed Chinese stocks after Ant Group Co.’s approved fundraising plan spurred bets the country’s regulatory clampdown on its internet sector is easing.
Tesla Inc. rose, poised for a rebound after Tuesday’s 12% slump, as investor Cathie Wood topped up her holding of shares in the electric-vehicle maker.
After a volatile year that saw equities tumble with bonds on worries about inflation and higher interest rates, investors are seeking signs of cooling that will allow policymakers to slow the pace of rate hikes. A report Wednesday showed French inflation unexpectedly slowed, adding to signs of easing price pressure in the euro area.
“If you don’t see a deep recession, you see a shallow recession, all that would be the recipe for markets to see a nice rally starting perhaps in the second half,” said Vasu Menon, executive director, investment strategy for OCBC Bank Wealth Management, in an interview with Bloomberg Television. “There is a lot of liquidity on the sidelines waiting to get back into play, waiting for those macro cues.”
Traders are also awaiting minutes from the Federal Reserve’s last meeting due later Wednesday, and the keenly watched jobs report later this week. Treasuries rose further, after Tuesday’s strongest start to a year since 2001.
Elsewhere, oil deepened a slump amid a deteriorating demand outlook.
The Australian dollar surged on reports that China is mulling an end to a ban on Australian coal. The yen advanced after the Bank of Japan unveiled further unscheduled bond buying.
Story continues
Key events this week:
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FOMC meeting minutes, Wednesday
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US ISM manufacturing, JOLTS job openings, Wednesday
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Eurozone PPI, Thursday
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US ADP employment change, initial jobless claims, Thursday
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China trade, Caixin PMI, Thursday
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Eurozone retail sales, CPI, consumer confidence, Friday
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Germany factory orders, Friday
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US nonfarm payrolls, factory orders, durable goods, Friday
The main markets moves are:
Stocks
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S&P 500 futures rose 0.4% as of 4:55 a.m. New York time
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Nasdaq 100 futures rose 0.5%
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Futures on the Dow Jones Industrial Average rose 0.3%
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The Stoxx Europe 600 rose 0.9%
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The MSCI World index fell 0.1%
Currencies
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The Bloomberg Dollar Spot Index fell 0.7%
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The euro rose 0.7% to $1.0619
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The British pound rose 0.8% to $1.2063
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The Japanese yen rose 0.5% to 130.35 per dollar
Cryptocurrencies
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Bitcoin rose 1% to $16,836.13
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Ether rose 3.2% to $1,249.39
Bonds
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The yield on 10-year Treasuries declined four basis points to 3.70%
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Germany’s 10-year yield declined eight basis points to 2.30%
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Britain’s 10-year yield declined seven basis points to 3.59%
Commodities
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West Texas Intermediate crude fell 1.8% to $75.58 a barrel
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Gold futures rose 1.1% to $1,867 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Vildana Hajric, Isabelle Lee and Richard Henderson.
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