European shares advanced, boosted by oil majors as crude prices recovered. US futures gained as investors parsed comments from Federal Reserve officials to assess the potential for slower interest rate hikes.
(Bloomberg) — European shares advanced, boosted by oil majors as crude prices recovered.
US futures gained as investors parsed comments from Federal Reserve officials to assess the potential for slower interest rate hikes.
The Stoxx Europe 600 Index climbed 0.7%, with Shell Plc and BP Plc among the biggest drivers of the gains.
Contracts on the S&P 500 and the Nasdaq 100 were both higher, reversing earlier losses. In US premarket trading, Zoom Video Communications Inc. fell after reporting slower sales and trimming its full-year revenue forecast.
The dollar weakened against all major currencies and Treasury yields declined.
Oil advanced after Saudi Arabia pushed back against reports of a potential OPEC+ production increase.
Fed officials have broadly maintained their steadfast stance to fight against inflation. Yet San Francisco Fed President Mary Daly also said that officials need to be mindful of the lags in the transmission of policy changes, while her Cleveland counterpart Loretta Mester said she’s open to slowing the tempo of rate hikes.
“In a year like this, it is so difficult and often a fool’s errand to read too much into any one speech from one Federal Reserve official,” Sarah Ponczek, financial adviser at UBS Private Wealth Management, said on Bloomberg Television.
“The reality is that we do expect that the Federal Reserve is still likely going to raise interest rates again in December.”
JPMorgan Chase & Co. strategist Marko Kolanovic, who until recently had been one of the most vocal bulls on Wall Street, said risky assets may languish until the Fed reverses course on its hawkish campaign to raise interest rates.
A near-term pivot is likely not in the cards and JPMorgan expects assets to still be “rangebound with a more pronounced downside risk.”
In Asia, a gauge of the region’s equities was off its intraday highs as stocks in Hong Kong slid with China’s daily virus infections climbing to near the highest on record.
Covid-control restrictions now affect a fifth of China’s economy. Chinese stocks listed in the US fell in premarket New York trading.
China’s reopening may only be a story for the second quarter of next year as the country enters the winter months, according to Dwyfor Evans, head of Asia Pacific macro strategy at State Street Global Markets.
“To actually expect a very conservative political body to suddenly open up China and remove restrictions in November and into the most dangerous season as it were for these type of pandemic instances, we always thought that was very, very optimistic,” Evans said on Bloomberg Television.
Gold rose on the weaker dollar.
Cryptocurrency prices were mixed, with investors braced for more ructions as further digital-asset sector bankruptcies loom following the demise of Sam Bankman-Fried’s FTX empire.
Key events this week:
- US Richmond Fed manufacturing index, Tuesday
- OECD releases Economic Outlook, Tuesday
- Fed’s Loretta Mester and James Bullard speak, Tuesday
- S&P Global PMIs: US, Euro area, UK, Wednesday
- US MBA mortgage applications, durable goods, initial jobless claims, University of Michigan sentiment, new home sales, Wednesday
- Minutes of the Federal Reserve’s Nov.
1-2 meeting, Wednesday
- ECB publishes account of its October policy meeting, Thursday
- US stock and bond markets are closed for the Thanksgiving holiday, Thursday
- US stock and bond markets close early, Friday
Some of the main moves in markets:
Stocks
- The Stoxx Europe 600 rose 0.7% as of 9:49 a.m.
London time
- Futures on the S&P 500 rose 0.2%
- Futures on the Nasdaq 100 rose 0.2%
- Futures on the Dow Jones Industrial Average rose 0.2%
- The MSCI Asia Pacific Index rose 0.4%
- The MSCI Emerging Markets Index fell 0.3%
Currencies
- The Bloomberg Dollar Spot Index fell 0.3%
- The euro rose 0.3% to $1.0271
- The Japanese yen rose 0.6% to 141.32 per dollar
- The offshore yuan rose 0.6% to 7.1371 per dollar
- The British pound rose 0.3% to $1.1862
Cryptocurrencies
- Bitcoin rose 0.4% to $15,687.78
- Ether fell 1.1% to $1,081.87
Bonds
- The yield on 10-year Treasuries declined three basis points to 3.79%
- Germany’s 10-year yield was little changed at 2.00%
- Britain’s 10-year yield was little changed at 3.19%
Commodities
- Brent crude rose 0.7% to $88.05 a barrel
- Spot gold rose 0.6% to $1,747.97 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Tommi Utoslahti and Tassia Sipahutar.
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
