Stocks, U.S. Futures Gain Before Earnings Kick Off

Market Wrap: Europe, Asia shares climb alongside S&P 500 Index contracts. Oil turns lower as traders assess output cuts; gold edges up.

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Stocks advanced on Tuesday along with U.S. index futures at the outset of one of the most uncertain earnings seasons on record, after the coronavirus pandemic upended the global economy. Gold rose toward a fresh seven-year high.

An increase in the Stoxx Europe 600 Index took the benchmark about 20% above its 2020 low, into territory some consider a bull market. Futures on the three main American equity gauges all climbed as traders prepared for profit reports from global heavyweights including JPMorgan Chase & Co. and Wells Fargo & Co. All the major equities benchmarks in Asia jumped more than 1.5%, with the exception of Hong Kong’s. Treasuries nudged higher, while the dollar fluctuated versus many of its major peers.

Earnings season kicks off this week with some of the world’s biggest banks reporting, giving investors their first glimpse of how bad the hit to global profits will be. Fidelity International analysts expect earnings to almost halve at companies globally this year. While Goldman Sachs Group Inc. forecasts advanced economies will shrink about 35% this quarter, investors are focusing on whether trillions of dollars in stimulus and rescue plans will fuel a rebound in risk assets when the infections curve flattens.

India and France extended their lockdowns, while others including Germany and the U.K. face decisions on whether to keep measures in place. U.S. governors formed coalitions for the reopening of their economies, even as President Donald Trump insisted he alone has that authority.

Elsewhere, Chinese metals prices rose after March trade figures beat expectations, with stronger readings for both imports and exports in yuan terms.

In focus this week:

  • U.S. banks and financial firms begin reporting first-quarter earnings, led by JPMorgan and Wells Fargo on Tuesday; Wednesday will bring Citigroup, Bank of America and Goldman Sachs Group Inc.; BlackRock is set for Thursday.
  • South Korea holds parliamentary elections and the Bank of Canada has a rate decision Wednesday.
  • Also Wednesday, U.S. retail sales are poised to fall in March by the most ever seen.
  • China releases GDP, industrial production and retail sales and jobless figures Friday.

These are the main moves in markets:

Stocks

  • The Stoxx Europe 600 Index rose 0.9% as of 9:31 a.m. London time.
  • Futures on the S&P 500 Index climbed 1%.
  • Germany’s DAX Index increased 1.1%.
  • The MSCI Asia Pacific Index rose 1.6%.

Currencies

  • The Bloomberg Dollar Spot Index decreased 0.1%.
  • The euro was little changed at $1.0918.
  • The British pound gained 0.4% to $1.2563.
  • The Japanese yen strengthened 0.2% to 107.59 per dollar.
  • South Africa’s rand strengthened 0.6% to 18.0222 per dollar.

Bonds

  • The yield on two-year Treasuries dipped one basis point to 0.24%.
  • The yield on 10-year Treasuries declined two basis points to 0.75%.
  • Germany’s 10-year yield rose less than one basis point to -0.35%.
  • Japan’s 10-year yield increased one basis point to 0.03%.

Commodities

  • West Texas Intermediate crude dipped 1.9% to $21.99 a barrel.
  • Gold strengthened 0.4% to $1,722.62 an ounce.
  • LME copper rose 2.9% to $5,166.50 per metric ton.

Bloomberg

 

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