(Bloomberg) — European stocks gained after a heavy session in Asia, as investors awaited key corporate earnings for fresh trading cues.
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The Stoxx Europe 600 rose 0.3% at the open, led by basic resources after the world’s biggest miner, BHP Group Ltd., posted full-year profit broadly in line with expectations, with revenue from iron ore and copper rising despite weak Chinese demand. . outlook. Peers Anglo American Plc and Rio Tinto Plc rose more than 1.5%.
U.S. equity futures were steady after Monday’s tech-led losses on Wall Street. A gauge of Asian shares fell 0.1%, snapping a three-day winning streak after rising over 11% from August 5 through Monday. Treasury yields and the dollar remained stable.
Markets took a breather after a strong run earlier this month, led by widespread belief that the Federal Reserve will begin cutting interest rates in September. Nvidia Corp’s anticipated financial results are due on Wednesday, as investors look for more clarity on demand driven by artificial intelligence, the backbone of this year’s profits, amid concerns about its valuation. Shares of the tech giant fell 2.3% on Monday.
“Higher valuations against the backdrop of a slowing economy are striking a tone of caution in the near term,” said Brent Schutte, chief investment officer at Northwestern Mutual. “While the S&P 500 has produced strong gains this year, performance has been driven almost exclusively by a handful of tech juggernauts — meaning other stocks in the index are trading at lower multiples and could benefit if the market expands.”
Japanese stocks were among the few bright spots in Asia, registering modest gains as smaller and domestically oriented companies benefited from a stronger yen.
Chinese consumption stocks are in the spotlight after PDD Holdings Inc. A warning of slow sales by the owner Temu was the latest disappointment of the sector, where the country’s largest consumer company has reported a revenue miss. The Hang Seng Tech index declined by 1.8%.
This week’s US inflation figures are likely to confirm that long-awaited rate cuts are coming, while readings on consumer spending appear to indicate that the central bank has been successful in keeping expansion under control.
Economists saw the price index of personal consumption expenditures excluding food and energy — the Fed’s preferred measure of inflation — rising 0.2% in July for a second straight month. That would pull the three-month annual rate of so-called core inflation down to 2.1%, slightly above the central bank’s 2% target.
The President of the Fed Bank of San Francisco Mary Daly said it is appropriate to start cutting rates, while her Richmond partner Thomas Barkin said he still sees rising risks to inflation, although he supports “neppon down” rates.
“Powell closed the deal for the September cut in Jackson Hole – leaving our thesis to continue the spread/rotation,” said Ohsung Kwon at Bank of America Corp. “But don’t sleep on Nvidia’s earnings, a consistent S&P driver and still a risk to the market if they disappoint.
In commodities, oil fell after a three-day rally, with the threat of a halt in Libyan supplies offset by a still shaky demand outlook. Gold falls.
This week’s highlights:
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US Conference Board consumer confidence, Tuesday
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Nvidia’s earnings on Wednesday
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The Fed’s Raphael Bostic and Christopher Waller spoke on Wednesday
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Eurozone consumer confidence, there
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US GDP, initial jobless claims, Thursday
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Fed’s Raphael Bostic said, Thursday
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Japan unemployment, CPI Tokyo, industrial production, retail sales, Friday
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Eurozone CPI, unemployment, Friday
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US personal income, spending, PCE; consumer sentiment, there
Some of the main movements in the market:
Savings
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The Stoxx Europe 600 rose 0.3% at 8:10 am London time
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S&P 500 futures were unchanged
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Nasdaq 100 futures rose 0.1%
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Futures on the Dow Jones Industrial Average were little changed
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MSCI Asia Pacific index down 0.2%
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MSCI Emerging Markets index down 0.4%
currency
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.1167
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The Japanese yen fell 0.2% to 144.88 per dollar
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The offshore yuan was little changed at 7.1263 per dollar
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The British pound rose 0.2% to $1.3211
Cryptocurrencies
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Bitcoin fell 1% to $62,842.08
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Ether fell 0.1% to $2,685.65
Bond
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The yield on 10-year Treasuries was little changed at 3.82%
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Germany’s 10-year yield advanced one basis point to 2.26%
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UK 10-year yields advanced seven basis points to 3.99%
Commodity
This story was produced with the help of Bloomberg Automation.
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