Stocks, U.S. Futures Rise as Traders Mull Recovery: Markets Wrap

(Bloomberg) — European stocks rose along with U.S. equity futures Thursday as traders took in their stride further signs of the global inflationary pressures building up in the recovery from the pandemic.

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U.S. futures pushed higher after Wall Street snapped a three-day losing streak, with contracts on the tech-heavy Nasdaq 100 outperforming those on the S&P 500. Tech firms were also among the biggest gainers in the Stoxx Europe 600 index, along with miners.

Treasuries trimmed an overnight rally, but the 10-year yield remained around 1.5%. A report showed U.S. inflation held above 5%, while the latest Fed minutes signaled a tapering of bond purchases from mid-November or mid-December.

Crude oil stabilized above $80 a barrel and gold dipped from the highest in nearly a month. The U.S. dollar weakened against all Group of 10 peers except the yen.

Investors continue to evaluate the resilience of economic reopening to supply chain disruptions, a jump in energy prices and the prospect of reduced central bank support. In the earnings season so far, executives at S&P 500 companies mentioned the phrase “supply chain” about 3,000 times on investor calls as of Tuesday — far higher than last year’s then-record figure.

The current environment “still favors equities in the medium term although less so than before,” Virginia Martin Heriz, a portfolio manager in the macro strategies team at J.P.Morgan Asset Management, said in a seminar. While there may be a “soft” slowdown in the U.S. and Europe, “this is not stagflation that we are talking about because we are still growing well above trend.”

In cryptocurrencies, Bitcoin has resumed its rally, taking the largest token above $58,000. Elsewhere, Hong Kong markets were shut Thursday for a holiday.

The lira weakened to a record low Thursday after Turkish President Recep Tayyip Erdogan fired three central bankers.

Here are a few events to watch this week:

  • Bank of America Corp., Morgan Stanley and Citigroup Inc. report earnings on Thursday

  • U.S. initial jobless claims, PPI on Thursday

  • Goldman Sachs Group Inc. reports earnings on Friday

  • U.S. business inventories, University of Michigan consumer sentiment, retail sales on Friday

For more market analysis, read our MLIV blog.

Some of the main moves in markets:

Stocks

  • The Stoxx Europe 600 rose 0.6% as of 8:48 a.m. London time

  • Futures on the S&P 500 rose 0.5%

  • Futures on the Nasdaq 100 rose 0.7%

  • Futures on the Dow Jones Industrial Average rose 0.4%

  • The MSCI Asia Pacific Index rose 0.6%

  • The MSCI Emerging Markets Index rose 0.6%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.1%

  • The euro rose 0.1% to $1.1606

  • The Japanese yen was little changed at 113.36 per dollar

  • The offshore yuan was little changed at 6.4332 per dollar

  • The British pound rose 0.2% to $1.3691

Bonds

  • The yield on 10-year Treasuries was little changed at 1.54%

  • Germany’s 10-year yield was little changed at -0.13%

  • Britain’s 10-year yield advanced one basis point to 1.10%

Commodities

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