(Bloomberg) — Stocks in Europe gained and equity-index futures were steady as mostly positive earnings reports buoyed sentiment. Treasury yields dipped for a second day.
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The Stoxx Europe 600 Index added about 0.4% at the open, led by the technology and media sectors. Software developer SAP SE added 3.5% after a third-quarter revenue beat. Banks declined as the European Central Bank considers ways to stop lenders from profiting unduly as interest rates rise, with HSBC Holdings Plc slumping more than 5% after it reported higher-than-expected charges for possible loan losses. UBS Group AG bucked the trend, advancing more than 3% after exceeding earnings estimates.
Futures on the S&P 500 and Nasdaq 100 fluctuated between small gains and losses after Monday’s strong performance on Wall Street. A fifth of S&P 500 companies have now posted third-quarter earnings, with more than half outperforming estimates. Microsoft Corp., Alphabet Inc., Amazon.com Inc. and Apple Inc. report this week.
Manufacturing and services data for the US underwhelmed on Monday, indicating Federal Reserve rate hikes are beginning to slow activity. Fed officials have entered a blackout period ahead of the central bank’s meeting next week, where it’s expected to raise rates 75 basis points. Investors are starting to speculate that the central bank may be approaching the end of its aggressive tightening campaign.
“Investors are getting more confident that inflation will soften as the consumer rethinks massive purchases,” said Edward Moya, a senior markets analyst at OANDA Corp. “Fed rate-hike expectations will remain volatile, but expectations are growing that a weaker economy will let the Fed pause their tightening after the February policy meeting.”
A gauge of global stocks held a small advance as Chinese stocks staged a modest rebound following Monday’s historic selloff, with traders weighing cheap valuations against the prospects of more market-unfriendly policies during President Xi Jinping’s third term.
The offshore yuan fell to the lowest level since trading began a dozen years ago, as Xi’s power grab raised concern that concentrated decision-making could weaken growth and destabilize geopolitics. The decline extended after China’s central bank set the official fixing rate for the currency at the lowest level in 14 years.
“We’re certainly staying away from the Chinese market right now because the political scene is not favorable,” Laila Pence, president of Pence Wealth Management, said in an interview on Bloomberg TV. “There’s a lot less risk in the US and just as much upside.”
Elsewhere in markets, oil steadied as traders assessed near-term supply tightness in the crude market and broad appetite for risk assets including commodities. Gold was also steady. Bitcoin continued to track sideways, holding above $19,000.
Key events this week:
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Earnings due this week include: Apple, Microsoft, Exxon Mobil, Ford Motor, Credit Suisse, Airbus, Alphabet, Amazon, Bank of China, Boeing, Caterpillar, Cnooc, Coca-Cola, Intel, McDonald’s, Mercedes-Benz, Merck, Samsung Electronics, Shell, UPS, Vale, Visa, Volkswagen
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US Conference Board consumer confidence, Tuesday
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Bank of Canada rate decision, Wednesday
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ECB rate decision, Thursday
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US GDP, durable goods orders, initial jobless claims, Thursday
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Bank of Japan policy decision, Friday
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US personal income, personal spending, pending home sales, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
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The Stoxx Europe 600 rose 0.5% as of 8:19 a.m. London time
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Futures on the S&P 500 rose 0.1%
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Futures on the Nasdaq 100 rose 0.2%
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Futures on the Dow Jones Industrial Average were little changed
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The MSCI Asia Pacific Index rose 0.3%
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The MSCI Emerging Markets Index fell 0.1%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro fell 0.2% to $0.9858
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The Japanese yen was little changed at 148.95 per dollar
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The offshore yuan was little changed at 7.3320 per dollar
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The British pound was little changed at $1.1284
Cryptocurrencies
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Bitcoin fell 0.4% to $19,300.69
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Ether fell 0.3% to $1,347.77
Bonds
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The yield on 10-year Treasuries declined six basis points to 4.18%
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Germany’s 10-year yield declined seven basis points to 2.26%
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Britain’s 10-year yield declined seven basis points to 3.67%
Commodities
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