European stocks rose alongside U.S. equity futures on Thursday, trimming some losses from a day earlier as investors seeking to gauge the extent of damage caused by the coronavirus await the next set of corporate earnings and economic data. The dollar extended gains.
The Stoxx Europe 600 Index opened higher with all major national gauges and most industry sectors in the green. Contracts for the three main American benchmarks also advanced after sliding on Wednesday amid miserable economic data. Shares fell in Hong Kong and Japan while stocks in China saw modest gains. Treasuries edged lower after rallying a day earlier and oil fluctuated near its lowest in two decades.
The market is now bracing for the weekly U.S. unemployment figures due Thursday as both corporate results and economic data highlight the severe hit from the shutdown of industry and commerce needed to combat the spread of the coronavirus. American retail sales and factory output posted historic declines in March, and surveys in April looked even worse. Manufacturing in New York state and sentiment among the nation’s homebuilders plunged.
“The economic reality and corporate earnings reality, at some stage, needs to reconcile with the markets,” Tai Hui, Asia-Pacific chief market strategist at JPMorgan Asset Management, said in a phone interview. “The market hasn’t fully factored in the uncertainties or potential risks in terms of earnings downgrades.”
Meanwhile, President Donald Trump said data suggest the U.S. has “passed the peak” on new cases and added he will announce on Thursday guidelines to relax stay-at-home rules. Covid-19 has now infected 2 million people globally, with fatalities topping 134,000.
“We don’t know what the economy is going to look like over the next year — there is a lot of uncertainty with the virus,” Mark Kiesel, global credit chief investment officer at Pacific Investment Management Co., said on Bloomberg TV. “We are not through the woods yet — there could be a second wave.”
Elsewhere, oil fluctuated after tumbling Wednesday amid a record collapse in fuel demand and the biggest ever weekly increase in U.S. domestic crude supplies. Mexico’s peso retreated after Fitch downgraded the country’s debt rating, while the Philippines cut rates in an unscheduled move.
Still to come this week:
- BlackRock Inc., Morgan Stanley and BNY Mellon are due to report earnings.
- China releases GDP, industrial production and retail sales and jobless figures Friday.
These are the main moves in markets:
Stocks
- Futures on the S&P 500 Index rose 0.7% as of 9:22 a.m. London time.
- The Stoxx Europe 600 Index rose 1.1%.
- The MSCI Asia Pacific Index sank 1%.
Currencies
- The Bloomberg Dollar Spot Index increased 0.3%.
- The euro decreased 0.3% to $1.088.
- The British pound fell 0.2% to $1.2487.
- The Japanese yen weakened 0.3% to 107.77 per dollar.
Bonds
- The yield on 10-year Treasuries climbed one basis point to 0.65%.
- Germany’s 10-year yield gained three basis points to -0.44%.
- Britain’s 10-year yield rose one basis point to 0.311%.
Commodities
- West Texas Intermediate crude climbed 1.3% to $20.12 a barrel.
- Gold strengthened 0.3% to $1,722.35 an ounce.
— Bloomberg