Stocks Rise Before U.S. Earnings; Treasuries Climb: Markets Wrap




 

(Bloomberg) -- European stocks advanced with futures on U.S. equity indexes as investors prepared for the first big third-quarter earnings and further developments in the trade dispute between the world's two largest economies. Treasuries also climbed following a holiday.

The Stoxx Europe 600 Index rose, with 18 of 19 sectors in the green led by travel-company shares. While Asian equities were mixed, Japan's gauge jumped as investors there returned from a long weekend to react to progress announced on a U.S.-China interim trade deal. Treasury Secretary Steven Mnuchin told CNBC television Monday the sides made "substantial progress" last week in negotiations and he expected Presidents Donald Trump and Xi Jinping to finalize the accord at a summit in Chile next month. Contracts on the three main American equity indexes all rallied after the underlying benchmarks edged lower on Monday.

The pound strengthened as the European Union's chief negotiator insisted a Brexit accord is possible this week, even though it's getting "more and more difficult." Crude oil futures slipped and gold drifted.

The earnings season begins in earnest on Tuesday, with results due from big U.S. banks including JPMorgan and Goldman Sachs. The reports will be closely parsed by investors given the global backdrop of slowing growth, falling interest rates and a host of unpredictable macro risks from the impeachment investigation into Trump and the trade war to Brexit and Turkey's incursion into Syria.

"We would advise our clients to take some profits here going into this rally," Tuan Huynh, Asia-Pacific chief investment officer at Deutsche Bank Wealth Management, said on Bloomberg Television. In the past, "Trump has announced some sort of agreement but in the end it turns out to be a little bit premature," so caution is warranted on the trade front, he said.

Meanwhile, the Turkish lira steadied and the country's benchmark stock index rose after Trump imposed milder penalties over its military campaign in Syria than U.S. lawmakers had demanded.

Here are some key events coming up this week:

Wednesday brings a monetary policy decision in South Korea.U.S. retail sales are forecast to increase for a seventh straight month. Sales in the "control group" are also expected to rise. Consumer spending is carrying the weight of U.S. economic growth so the data will be monitored closely for any signs of slowing.China releases third-quarter GDP, September industrial production and retail sales data on Friday.

Here are the main moves in market:

Stocks

The Stoxx Europe 600 Index increased 0.4% as of 9:22 a.m. London time.Futures on the S&P 500 Index gained 0.5%.France's CAC 40 Index rose 0.5%.Turkey's Borsa Istanbul 100 Index surged 1.6%.Japan's Topix index surged 1.6%.

Currencies

The Bloomberg Dollar Spot Index fell 0.1%.The British pound jumped 0.4% to $1.2656.The euro was unchanged at $1.1027.The Turkish lira strengthened 0.1% to 5.9193 per dollar.The Japanese yen was little changed at 108.38 per dollar.

Bonds

The yield on 10-year Treasuries dipped four basis points to 1.69%.The yield on two-year Treasuries fell four basis points to 1.55%.Germany's 10-year yield dipped less than one basis point to -0.46%.Australia's 10-year yield decreased three basis points to 1.0175%.

Commodities

West Texas Intermediate crude fell 0.4% to $53.36 a barrel.Gold was little changed at $1,492.67 an ounce.Arabica coffee futures gained 0.2% to $0.95 a pound.LME nickel surged 2.1% to $16,890 per metric ton.

--With assistance from Andreea Papuc.

To contact the reporter on this story: Todd White in Madrid at twhite2@bloomberg.net

To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net;Christopher Anstey at canstey@bloomberg.net

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

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