(Bloomberg) — European stocks and U.S. futures rose Tuesday as the prospect of solid corporate earnings helped counter concerns stemming from elevated inflation. Treasuries advanced and the dollar declined.
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Basic resources led an advance in Europe’s Stoxx 600 index, while shares in Asia were little changed. Bellway Plc shares rose after the U.K. homebuilder met estimates, despite supply chain issues, labor shortages and disruption to fuel supplies.
Global bond yields were mixed and Australian bonds were whipsawed after the central bank said it remains committed to maintaining highly supportive monetary conditions to bolster the economy. In China, the focus is on debt-laden China Evergrande Group’s real-estate unit and its coupon payment due on local debt.
Markets are taking some comfort from robust earnings, but also grappling with the prospect of tightening monetary policy to quell price pressures. Traders are waiting to see if a slate of Federal Reserve speakers this week will try to calm the jitters stemming from the scaling back of pandemic-era policy support.
“The world is watching interest rates more closely than it has for some time — and rightly so, the moves have been emphatic, especially in the short-term maturities,” Chris Weston, head of research at Pepperstone Financial Pty, wrote in a note. He added it’s “impressive how resilient and calm markets are in the face of the rates repricing.”
Oil rose, while European natural gas prices declined as mild and windy weather will provide some relief to the region’s strained energy system. Investors are paying close attention to the earnings season to see how higher costs for energy and raw materials are affecting margins.
“We are going to get a lot of information on whether margins are being squeezed by these shortages and higher prices and wages continuing to go up,” JoAnne Feeney, Advisors Capital Management partner and portfolio manager, said on Bloomberg Television. She added the delta-plus Covid variant could be among sources of volatility in the next few months.
Ericsson AB fell after sales were hit by supply chain issues that have been plaguing businesses around the world. Danone SA, the world’s largest yogurt maker, forecast that inflation could worsen next year, leading the company to shift price increases to consumers and seek more cost savings.
Bitcoin continued its climb toward all-time highs, bolstered by optimism over the upcoming launch of the first Bitcoin futures exchange-traded fund in the U.S. by asset manager ProShares.
For more market analysis, read our MLIV blog.
Events to watch this week:
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Earnings roll in, including from AT&T Inc., Barclays Plc, Johnson & Johnson, Netflix Inc. and Tesla Inc.
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Bank Indonesia rate decision and briefing, Tuesday
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China’s NPC Standing Committee starts a meeting Tuesday that goes on through Oct. 23. A review of anti-monopoly regulations is on the agenda
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U.S. housing starts, Tuesday
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EIA crude oil inventory report, Wednesday
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China property prices, loan prime rates, Wednesday
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U.S. Conference Board leading index, U.S. existing home sales, jobless claims, Thursday
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Fed Chair Jerome Powell takes part in policy panel discussion, Friday
Some of the main moves in markets:
Stocks
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The Stoxx Europe 600 rose 0.1% as of 9:36 a.m. London time
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Futures on the S&P 500 rose 0.2%
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Futures on the Nasdaq 100 rose 0.2%
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Futures on the Dow Jones Industrial Average rose 0.2%
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The MSCI Asia Pacific Index was little changed
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The MSCI Emerging Markets Index was little changed
Currencies
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The Bloomberg Dollar Spot Index fell 0.4%
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The euro rose 0.4% to $1.1652
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The Japanese yen rose 0.3% to 114.02 per dollar
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The offshore yuan rose 0.5% to 6.3928 per dollar
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The British pound rose 0.4% to $1.3786
Bonds
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The yield on 10-year Treasuries declined two basis points to 1.58%
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Germany’s 10-year yield was little changed at -0.15%
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Britain’s 10-year yield was little changed at 1.13%
Commodities
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Brent crude rose 0.5% to $84.73 a barrel
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Spot gold rose 1% to $1,782.63 an ounce
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