Stocks Rise in Europe; U.S. Futures, Dollar Steady: Markets Wrap
(Bloomberg) — Stocks advanced in Europe and U.S. equity futures were little changed on Friday as traders evaluated the resilience of the global recovery to the prospect of reduced Federal Reserve stimulus and risks from China.
Commerzbank AG led an increase in Europe’s Stoxx 600 Index on reports that Cerberus Capital would consider raising its stake. Travel companies advanced following surprise strength in U.S. retail sales, which eased economic worries sparked by the delta strain and highlighted the case for less expansive Fed support. Azelis SA, a distributor of food additives and specialty chemicals, surged in its Brussels trading debut after the biggest Belgian initial public offering since 2007.
Basic resources were the only sector in the red as iron ore’s slump toward $100 a ton weighed on miners. Meanwhile, U.K. stocks underperformed after retail sales fell unexpectedly for a fourth month in August, the worst stretch of declines in at least 25 years.
S&P 500 and Nasdaq 100 futures were steady, while Asian equities were mixed amid the debt crisis at China Evergrande Group and a short-term cash injection by the central bank to help soothe nerves. Treasury yields and the dollar were little changed.
Global equities are on course for a second weekly drop, restrained by the impact of the delta virus variant on economic reopening, the implications of elevated inflation and the upheavals in China. The Fed’s policy meeting next week is a possible source of volatility as traders await more clues about the timeline for paring bond purchases and eventually hiking interest rates.
“Investors just should be prepared for the fact that returns are much more likely to be muted over the next five years than what we’ve really benefited and enjoyed over the last five,” Jim McDonald, Northern Trust Bank chief investment strategist, said on Bloomberg Television. That view incorporates the prospect of lower valuations for Chinese firms facing more government involvement, he said.
Oil slipped, while gold advanced. An index of commodity prices dipped, but remains in sight of a record hit in 2011, underscoring the inflation concerns rippling across the world economy.
Meanwhile, the European Central Bank rejected the accuracy of a Financial Times report on the euro-area’s interest-rate outlook. Bund futures had dropped on the article, which said the ECB could hit its 2% inflation target by 2025 based on unpublished internal models that raised the prospect of earlier than-expected rate hikes.
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
The Stoxx Europe 600 rose 0.6% as of 9:54 a.m. London timeFutures on the S&P 500 were little changedFutures on the Nasdaq 100 were little changedFutures on the Dow Jones Industrial Average were little changedThe MSCI Asia Pacific Index fell 0.8%The MSCI Emerging Markets Index fell 0.9%
The Bloomberg Dollar Spot Index was little changedThe euro was little changed at $1.1778The Japanese yen fell 0.2% to 109.96 per dollarThe offshore yuan was little changed at 6.4493 per dollarThe British pound was little changed at $1.3801
The yield on 10-year Treasuries was little changed at 1.34%Germany’s 10-year yield advanced two basis points to -0.28%Britain’s 10-year yield advanced one basis point to 0.83%
Brent crude fell 0.3% to $75.43 a barrelSpot gold rose 0.7% to $1,765.19 an ounce
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