Stocks Mixed, U.S. Futures Edge Up; Yuan Touches 7: Markets Wrap
European stocks were mixed and U.S. index futures climbed as investors kept an eye on signs America and China are inching toward a trade deal. Treasuries fell, while the yuan briefly strengthened past 7 for the first time since August.X
The Stoxx Europe 600 Index opened little changed, with gains in miners offsetting declines in utilities shares, a day after the gauge advanced to a four-year high on mounting optimism the world's two largest economies would sign the first phase of an agreement to resolve their protectionist conflict this month. Futures on the S&P 500, Dow Industrials and Nasdaq 100 all pointed to a positive start on Wall Street, following records for each of the underlying gauges a day earlier.
Japanese shares led Asian gains as Tokyo traders caught up after a Monday holiday, with more modest advances in Shanghai, Hong Kong and Seoul. Australia's dollar rose after its central bank left interest rates unchanged and said past easing steps are offering support.
Investors appear to be catching their breath after bulls took the wheel in recent sessions amid signs of progress in the trade war, which is easing one of the biggest headaches for investors as they approach year-end. Add in solid earnings and rebounding growth expectations, and a risk-on rotation has been taking hold. In the latest trade news, China is reviewing locations in the U.S. where President Xi Jinping would be willing to meet with President Donald Trump to sign a pact, people familiar with the plans said.
"The sweet spot for global equities looks even more pronounced," Chris Weston, head of research at Pepperstone Group Ltd., said in a note Tuesday. "The current debate is not whether you are bullish, but whether there is too much short-term euphoria. At some stage valuation will matter, or at least cap the upside."
Meanwhile, markets got further support after China's central bank reduced the cost of one-year funds to banks for the first time since 2016, easing concerns about tightening liquidity. And Bank of Japan Governor Haruhiko Kuroda suggested his nation could sell more super-long term bonds, reflecting a desire for a steeper yield curve.
Here are some key events coming up this week:
- Earnings are due from companies including: SoftBank (SFTBY) and BMW (BMWYY) on Wednesday; Walt Disney (DIS), Toyota (TM), Deutsche Telekom (DTEGY) on Thursday.
- Regional Federal Reserve presidents including Charles Evans, John Williams and Patrick Harker speak at events on Wednesday.
- Bank of England monetary decision Thursday.
- The USDA World Agricultural Supply and Demand Estimates Report for November comes out Friday
These are the main moves in markets:
- Futures on the S&P 500 Index increased 0.2% as of 8:06 a.m. London time.
- The Stoxx Europe 600 Index was little changed.
- The Shanghai Composite Index advanced 0.5%.
- The MSCI Emerging Market Index gained 0.5%.
- The Bloomberg Dollar Spot Index dipped 0.1%.
- The euro climbed 0.1% to $1.1138.
- The British pound gained 0.1% to $1.2902.
- The onshore yuan gained 0.5% to 6.998 per dollar.
- The Japanese yen fell 0.2% to 108.82 per dollar.
- The yield on 10-year Treasuries jumped four basis points to 1.81%.
- The yield on two-year Treasuries climbed one basis point to 1.60%.
- Germany's 10-year yield gained three basis points to -0.32%.
- Britain's 10-year yield increased two basis points to 0.746%.
- Japan's 10-year yield advanced five basis points to -0.122%.
- West Texas Intermediate crude climbed 0.2% to $56.64 a barrel.
- Iron ore gained 0.6% to $80.69 per metric ton.
- Gold dipped 0.2% to $1,506.20 an ounce.
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