Stocks gained on positive earnings reports in Europe and optimism about the rates outlook. US futures fell after a late Wall Street rally.
(Bloomberg) — Stocks gained on positive earnings reports in Europe and optimism about the rates outlook. US futures fell after a late Wall Street rally.
The Stoxx Europe 600 index climbed, with oil-and-gas firm Equinor ASA and lender ABN Amro NV among those reporting an earnings beat. US futures were lower following a rally Tuesday led by the Nasdaq 100, after Federal Reserve Chair Jerome Powell passed up an opportunity to tamp down investor optimism. Chipotle Mexican Grill Inc. fell in late trading after profitability and a key measure of sales missed estimates.
A benchmark of Asian shares rose, with gains in Australia and South Korea offsetting an underperformance in Chinese stocks. Treasury yields and a gauge of the dollar ticked lower.
Risk sentiment got a boost after Powell highlighted that disinflation has begun. While he repeated that further hikes will likely be needed if the jobs market remains strong, his comments soothed traders who had expected a more aggressive pushback against a loosening in financial conditions following Friday’s bumper payrolls report.
“Another hawkish speech goes unheard,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said of Powell’s comments. “Investors focused on the fact that he appeared just as hawkish as he has always been, that he didn’t promise a 50bp hike at next meeting, and that he said that the Fed won’t actively shrink its balance sheet for at least a few years.”
Read: Powell Says Further Rate Hikes Needed and Bonds Take Heed
Shares in Adani Enterprises climbed for a second day, after a rout prompted by short seller Hindenburg Research’s scathing report published two weeks ago. Hedge fund and distressed debt investors have begun snapping up Adani company bonds. Ratings firm Moody’s said in a report that Indian banks’ exposure to the Adani Group is not large enough to affect their credit quality.
Elsewhere in markets, oil extended gains after its biggest one-day move since November, helped along by a rebound in demand from China.
Key events:
- US wholesale inventories, Wednesday
- New York Fed President John Williams is interviewed at Wall Street Journal live event, Wednesday
- US initial jobless claims, Thursday
- ECB President Christine Lagarde participates in EU leaders summit, Thursday
- Bank of England Governor Andrew Bailey appears before Treasury Committee, Thursday
- US University of Michigan consumer sentiment, Friday
- Fed’s Christopher Waller and Patrick Harker speak, Friday
Some of the main moves in markets:
Stocks
- The Stoxx Europe 600 rose 0.8% as of 10:07 a.m. London time
- S&P 500 futures fell 0.3%
- Nasdaq 100 futures fell 0.3%
- Futures on the Dow Jones Industrial Average fell 0.2%
- The MSCI Asia Pacific Index rose 0.6%
- The MSCI Emerging Markets Index rose 0.5%
Currencies
- The Bloomberg Dollar Spot Index fell 0.2%
- The euro rose 0.2% to $1.0750
- The Japanese yen rose 0.2% to 130.78 per dollar
- The offshore yuan fell 0.1% to 6.7912 per dollar
- The British pound rose 0.4% to $1.2095
Cryptocurrencies
- Bitcoin was little changed at $23,183.62
- Ether rose 0.2% to $1,670.62
Bonds
- The yield on 10-year Treasuries declined two basis points to 3.65%
- Germany’s 10-year yield advanced two basis points to 2.37%
- Britain’s 10-year yield was little changed at 3.31%
Commodities
- Brent crude rose 1.1% to $84.60 a barrel
- Spot gold rose 0.6% to $1,884.04 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Richard Henderson and Sagarika Jaisinghani.
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